| KOCHI, FEB 12: Tea prices in South
India have shown a major dip at the auctions during the previous
year. While the average price had picked up substantially in 2004,
going up to Rs 47.03 a kg from as low as Rs 39.94 the previous year,
2005 once again saw the average price at the three centres —
Kochi, Coonoor and Coimbatore — dip to Rs 42.67.
Trade sources now pin their hopes on reports of a drought in
Kenya, which have started reflecting in the improvement in prices
over the last two auctions. If the prediction of a 20-25% drop in
Kenyan crop was true, though it would be early to make such
estimates, the global surplus of around 80 million kg could be wiped
out.
But with the Indian exports dipping to around 166 million kg by
the end of last November and a carryover stock of around 20 million
kg, there was nothing much for the industry to cheer about, they
added. If the drought was severe, the global market would have to
look for other sources and India could make better inroads into
Pakistan, which imported Kenyan tea.
Trade sources attribute the fall in prices in 2005 to
over-production. The South Indian tea production is estimated to be
around 185 million kg, though production was higher at 193.5 million
kg in 2003. South, which accounts for one-fourth the production has
a 50% share in the country’s exports.
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