Tea production in the South in the first seven months of the current year has been affected by unfavourable weather conditions, said Peter Mathias, President, United Planters’ Association of Southern India (UPASI).

In a statement issued on Thursday, he pointed out that the South had reported a lower crop of 5.7 million kg during January-July.  

As per UPASI’s initial estimate, the crop is anticipated to be lower by 25 per cent in August, that is, lower by 4.3 million kg.  The cumulative decline in crop till August would be in the range of 10 million kg.

This trend is unlikely to be recouped in the remaining four months. Hence, for the fifth year in succession, the crop in the South will be in a declining mode.

Mr. Mathias said initially the crop was lower on account of drought-like situation in the first quarter. It was followed by excessive rain and overcast conditions, which were not conducive for the crop prospects in the second and third quarters. In the first two months of the third quarter, the weather was marked by excessive rain and reduced sunshine. This resulted in the cumulative loss of crop, amounting to about 10 million kg.

The prices are buoyant as a result of low crop levels coupled with higher domestic intake.  The latter is evident from the higher volume of tea routed through the auctions. It was higher by about by about 3 million kg. It could also be attributed to the change in the product mix in favour of CTC (crush, tear and curl) teas.

The average price realisation in the South is quite buoyant. For January-August, it is estimated at Rs.102.23 a kg compared to Rs.84.24 a kg in the corresponding period last year. The CTC price was higher by Rs.17.99 a kg and the Orthodox tea price by Rs.19.10 a kg.

Given the market fundamentals, the price should be moderately bullish ahead of festival season, Mr. Mathias said.