Indian tea prices jump to new record as floods in Assam, coronavirus outbreak slash output
Production losses have already pushed weekly auction prices to a record of Rs 232.60 per kilogramme, up 57 percent from a year ago, according to the Tea Board
Mumbai: Tea prices in the world’s second-biggest producer India have jumped to a record after intense floods and coronavirus movement restrictions trimmed output in the main producing region.
The price rise could support the beleaguered Indian tea industry which has struggled with rising production costs, but may limit New Delhi’s exports and boost shipments from rivals such as Kenya and Sri Lanka, multiple trade sources said.
Floods have damaged tea gardens in Assam - which accounts for over half of India’s production - where output had already been cut by labour movement restrictions to contain the coronavirus outbreak, Prabhat Bezboruah, chairman of India’s Tea Board said.
Floods in Assam have killed at least 84 people and displaced more than 2.75 million since May.
“The 10 percent crop loss is expected to be compensated by a 12 percent price rise after eight years of price stagnation, but next year prices may decline on likely reports of higher production,” Bezboruah said.
Production losses have already lifted weekly auction prices to a record of Rs 232.60 ($3.11) per kilogramme, up 57 percent from a year ago, according to the Tea Board.
That compares to annual average price moves of around 1 percent to 3 percent in recent years, said Kalyan Sundaram, secretary of the Calcutta Tea Traders’ Association.
The lost crop is unlikely to be recovered as many tea gardens remain submerged and the premium second flush crop that usually fetches higher prices has been damaged, said Nazrana Ahmed, chairman of Assam Tea Planters Association. Second flush refers to the leaves that bloom from a tea plant at the beginning of monsoon season after the first set are plucked.
“Production cost has gone up substantially in the last few years. Many tea producers may not survive unless prices sustain at current level,” said Sujit Patra, secretary at Indian Tea Association.
The Assam State Disaster Management Authority said one person in Silchar of Cachar district was lost to floodwaters. Nagaon is the worst hit district with over 3.51 lakh people in distress, followed by Cachar and Hojai
Nearly 1.97 lakh people in 20 districts of the state were affected in the last 24 hours due to floods
Assam: Three killed during landslide in Dima Hasao, around 25,000 people affected; flood alert issued
The hill district has been ravaged by flash floods and massive landslides at several places, snapping rail and road links from other parts of the state