Tea Production in India Decreases by around 10%; Led to Increase in Price

Due to extreme floods and coronavirus movement limits, Indian tea production in 2020 dropped 9.7 percent from a year earlier, boosting market rates by nearly a third to a record level, the state-run Tea Board said.

The price increase helped the besieged Indian tea industry, which was competing with increasing production costs, but decreased South Asian exports. India produced 1255.60 million kilograms of tea in 2020, declined by 9.7 percent when compared to the previous year as floods destroyed tea plantations in the northeastern state of Assam, which accounts for more than half of India's total production; where production has already been reduced to curb the coronavirus epidemic through labour movement constraints.

As per data collected by the Tea Board, lower production raised average tea prices in 2020 by 31 percent from a year earlier to a massive 184.69 rupees ($2.53) a kg. Increased prices, however, have reduced India's tea shipments, said a supplier in Kolkata. "Indian price rose but prices in rival Sri Lanka and Kenya didn't go up. Buyers shifted to these 2 nations," said the exporter, who refused to be named.

India, the second largest manufacturer of tea in the world, ships CTC (crush-tear-curl) category mostly to Egypt as well as Britain, shipping the traditional version to Iraq, Russia and Iran.

Sujit Patra, Secretary, Indian Tea Association, commented that the main tea generating north-eastern region of the nation has received strong rainfall during the last few months and that will lead to increased production in 2021.

"We are anticipating higher quality produce this year. Our import shipments are also expected to go up as major importing nations are emerging from COVID-19 that restricted their imports last year," Patra said.