Sector Trends     25-Apr-24
Commodity Futures
Tea: Export Earning Under Stress Globally
The all India auction quotes fell to Rs 115 per kg in third week of March 2024- holding around lowest level in two years.
Domestic Tea prices continued to soften. The all India auction quotes fell to Rs 115 per kg in third week of March 2024- holding around lowest level in two years. The prices averaged Rs 122 per kg in March 2024, down around 8% compared to February 2024. The average monthly prices were flat on a monthly basis though. There has been a sustained weakness in local Tea Prices recently despite tepid production trends. India’s Tea production stood at 1258 Million Kgs or mkg in April-December 23. The output in the corresponding period of last year stood at around 1264 mkg, down marginally by 0.47% on year. Weak exports are capping the prices.

FSSAI facilitates interactive session for the Small Tea Growers

The Food Safety & Standards Authority of India (FSSAI) recently facilitated an interactive session for the Small Tea Growers (STGs) in Coonoor. The session was held to ensure safe and hygienic production of tea and to strengthen awareness on the basics of Integrated Pest Management & Good Agricultural Practices for tea. It was supported by the Tea Board and Confederation of Indian Industry Food and Agriculture Centre of Excellence (CII FACE).

Wide ranging discussions were held which included insights into FSSAI notifications on Maximum Residue Levels (MRLs) for pesticides, emphasizing the importance of maintaining a recommended time gap between pesticide spraying and tea leaf plucking. During the session, the Small Tea Growers (STGs) were sensitized about the significance of safe use of pesticides adhering to the FSSAI norms on MRLs.

Thiru. R. Lalvena, Health Secretary & Commissioner Food Safety, Tamil Nadu appreciated the Capacity Building programme and assured their support for such initiatives focused on helping the STGs improve their practices. Inoshi Sharma, Executive Director, FSSAI highlighted the need for continuous handholding of STGs in improving the Good Agricultural Practices. More than 70 STGs participated in the interactive session followed by a training session for Small Tea Growers on awareness and compliance to FSSAI recommended MRLs in Tea. The sessions were conducted by experts from CII FACE and other industry partners.

For improving the quality of tea and increasing its safe and hygienic production, FSSAI along with industry partners, CII FACE plans to take forward a comprehensive capacity building initiative in various clusters across tea growing areas in Tamil Nadu, Kerala, Assam and West Bengal. India is the 2nd largest tea producer (~ 900,000 tonnes/year), with 20% of global tea produced in Darjeeling, Nilgiris, and Assam. Tea is the World’s 2nd highest consumed beverage with the highest consumption in China, India, Turkey and Pakistan.

Outlook:

Tea exports have been falling globally. The value of Chinese tea exports fell by 16.3% to $1.74 billion year over year (y/y) in 2023 compared to $2.1 billion in sales recorded in 2022, according to China Customs. The decline is the second consecutive annual drop in exports by value. Export volume also declined by 2% to 367.5 million kilos. Export value in 2022 had dipped by 9.6% y/y compared to 2021. Sri Lanka, the number two producer by value, saw export value increase to $1.31 billion on a lower volume of tea than in 2022, according to the Sri Lanka Tea Board (SLTB). Exports earned $1.26 billion in 2022, reversing declines in 2020 and 2021. India’s Tea exports stood at 227.91 million kgs or mkg in the calendar year 2023, recording a drop of around 1.37% in annual terms. The trend in India’s exports during first month of 2024 was encouraging though with total exports standing at 20 mkg, up 19% on year though the per kg unit price saw a dip of 13.30% to Rs 248 per kg

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