Posted by: Sujoy Das | March 28, 2012

Tea output to drop on dry weather

The Hindu Business Line

Kolkata, March 26 2012

Tea production in North India covering Assam and West Bengal for 2012 is set to register a sharp drop due to a prolonged dry spell and rising temperatures across the two States, according to the Indian Tea Association (ITA). Data compiled by ITA in respect of its members estimate rainfall deficit for West Bengal to range between 31 and 42 per cent during January-March 2012 as compared to the same period in 2011. The ITA also points out that the tea estates in Upper Assam particularly those in the south bank of the Brahmaputra are also experiencing severe drought conditions with rainfall deficit of 45 per cent in Dibrugarh and Tinsukia districts and around 38 per cent in Golaghat. North Bank and Cachar covering the Barak Valley report similar trends.

Crop is estimated to drop by around 60 per cent up to March as compared to 2011. The crop in Assam and West Bengal up to March 2012 can therefore, at best touch 20 million kg as against 46 million kg recorded for the corresponding period for 2011. This dry spell would undoubtedly have an adverse impact on the first flush. The production decline is also evidenced by a drop in the fresh arrivals at the auctions centres of West Bengal and Assam covering sale 14 and 15. According to reports, fresh arrivals at GTAC (Guwahati Tea Auction Centre) for Sale 14 is 2,487 packages (2012) as against 5,020 packages (2011) indicating a drop of around 50 per cent. District-level weather forecasts available for 26- 30th March reflect no possibility of any rain in the tea districts of Assam and West Bengal. Temperature is are predicted to touch 34°C to 38°C.

Tea Industry closed 2011 with a production of 988 million kg with prices averaging at around 2010 levels for both Assam and West Bengal. These regions have been required to increase the wage cost which forms a major component of the cost of production, up by 28 per cent in 2012. Besides severe cash flow problems, the likely drop in production due to abnormal weather conditions would result in significant revenue loss which will not be compensated by higher prices. Erratic rainfall patterns are compelling the industry to invest in improving irrigation infrastructure in tea estates. The cost of providing such infrastructure has been estimated at around Rs 7 lakh a hectare. The CCPA has requested the Tea Board and Ministry of Commerce for a stand-alone scheme to support irrigation under the 12th  Plan, a statement from ITA adds.

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