Beverage drinks like Tea, Coffee etc are becoming expensive these days. The Federation of All India Tea Traders Association recently came up with an announcement that the industry was going through a bad phase and it is unavoidable for companies to raise the price of tea. The Federation has decided to raise the price of Tea by Rs 40 in two installments. The first price hike of Rs 20 per Kilogram will come into effect from May 15th and the next installment of price hike will come into effect from mid June. Mr Mahendra Shah, President of FAITTA said that this price hike is not to increase the tea companies profits and also added that the companies were selling tea at loss for some months now. This decision had to be taken as the rains received were below the expected lines and also due to the lower rate of plucking of tea leaves in the north and south.If we just run through the world tea statistics, the total tea production in India fell by 2.5% from 39.4 M Kg in February 2008 to 36.8 M Kg in February 2009. On bifurcating the Indian production, North Indian production rose by 3.8% while the South Indian production fell by 6.3%. These figures show that the supply has fallen justifying the price rise. On the global front, major drop in production is seen in Sri Lanka with a fall of 41.3% as per February 2009 data followed by Zimbabwe with 38.3% decrease in production. These figures points out that the imports are going to be affected in coming days. In our country, companies were managing the supply within the country by resorting to sufficient imports. But as the tea production contracted in the global arena too, the companies are finding it difficult to meet the demand and make available uninterrupted supply. Due to lower production worldwide the price of imports also have risen leaving Indian companies with no option other than to raise the tea price.
If we take a glance at the global tea export data, we can see that Indian exports have fallen 25.2% to 24.7 M Kg in February 2009 from 33 M Kg in February 2008 followed by Sri Lanka with a fall of 15.8% in its tea exports showing that the trend is weak on the production side. The import of tea into India has also seen a falling trend. Falling imports tells that there is less production in the global front. Imports of India from Indonesia fell 0.03% and from Sri Lanka fell by 0.01% showing that these countries have less in their bags to export.
