India's tea prices soar as extreme weather slashes output
Heatwave, floods trim output in key Assam state, planters say
Output seen down 100 mln kg in 2024 from year ago, planters say
Tea prices jump 20% y/y on lower supply, Tea Board says
By Rajendra Jadhav
MUMBAI, July 8 (Reuters) -India's tea prices have been soaring and are expected to stay high as heatwaves and floods during the peak harvesting season slash output in key producing regions.
The price rise could support the beleaguered Indian tea industry, which has been struggling with rising production costs amid a negligible rise in tea prices in the past decade.
"Extreme weather events are hurting tea production. Excessive heat in May, followed by ongoing flooding in Assam, are reducing output," said Prabhat Bezboruah, a senior tea planter and former chairman of India's Tea Board.
Production was also affected by the government's decision to ban 20 pesticides, Bezboruah said.
India's tea production in May plunged more than 30% from a year earlier to 90.92 million kg, its lowest for that month in more than a decade, hurt by excessive heat and scant rainfall.
In the north-eastern state of Assam, which accounts for more than half the country's output, more than 2 million people have been affected by severe river flooding in July.
The upside in tea prices started after a heatwave reduced production from April onwards amid good demand, said Kalyan Sundaram, secretary of the Calcutta Tea Traders' Association.
In the last week of June, average tea prices surged to 217.53 rupees ($2.61) per kg, marking a near 20% increase from a year before, according to data compiled by the Tea Board.
Tea production improved in June after good rainfall gave respite from the heatwave, but again flooding in July has limited plucking in many districts of Assam, said a Jorhat-based tea planter.
"July is typically a peak production month, but this year we anticipate a shortfall of 15 to 20 million kg," the planter said.
India produced a record 1.394 billion kg of tea in 2023, but in 2024 production could fall by around 100 million kg, said Bezboruah.
The production shortfall should drive prices significantly higher, but financially weak and indebted producers are struggling to bargain with powerful buyers in peak production months, said a Kolkata-based trader.
More than half of India's total tea production is plucked during July to October.
Average tea prices in 2024 could be 16% to 20% higher than last year, but the increase is unlikely to reduce tea exports, as many buyers are boosting their purchases following the pesticide bans, said Bezboruah.
India's tea exports in the first four months of 2024 jumped 37% from a year ago to 92 million kg, according to the commerce ministry.
The country exports the CTC (crush-tear-curl) grade mainly to Egypt and the United Kingdom, with the orthodox variety shipped to Iraq, Iran and Russia.
($1 = 83.4575 Indian rupees)
Reporting by Rajendra Jadhav; Editing by Jan Harvey
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
