India’s tea industry is projected to experience a significant decline in production, with output expected to fall by over 100 million kilograms this year due to adverse weather conditions and early garden closures, according to industry stakeholders.
The January-October period of 2024 already witnessed a decrease of 66 million kilograms compared to the same period last year, with production dropping to 1,112 million kilograms from 1,178 million kilograms.
Despite production challenges, the industry has found some relief in improved price realisation and growing exports.
Indian Tea Exporters Association chairman Anshuman Kanoria reports that exports are expected to reach 240-250 million kilograms in 2024, up from 231 million kilograms in the previous year, showing resilience despite geopolitical challenges and currency issues.
Indian Tea Association chairman Hemant Bangur notes that while the industry’s situation has improved compared to 2023, it remains challenging. While Assam producers may achieve marginal profits or break even, north Bengal operations continue to face losses.
The impact of climate change has been particularly severe, with Tea Research Association (TRA) secretary Joydeep Phukan reporting that many growing regions experienced temperatures between 35 to 40 degrees Celsius and reduced rainfall, leading to a 20 percent reduction in production during peak cropping months.
Export markets show promising developments, particularly in Iraq, which now accounts for 20 percent of tea exports. Indian exporters have successfully maintained their presence in West Asian markets, initially entered during Sri Lanka’s production downturn.
The Tea Board’s proactive measures addressing maximum residue limit content and quality compliance with international standards have contributed to this export growth.
ICRA, a rating agency, reports that orthodox tea exports are expected to maintain levels above 100 million kilograms, while CTC tea exports have increased significantly.
The first eight months of 2024 saw orthodox tea exports reach 64 million kilograms, comparable to the previous year, while CTC exports rose to 87 million kilograms from 62 million kilograms in the same period of 2023.
The agency also notes that average auction prices for CTC tea increased by Rs 48 per kilogram during April-November, though recent auctions have shown softening prices.
The reduced production and low carryover inventory are expected to support strong tea prices through the early months of 2025.
