Kolkata: The tea market in 2007 might not be as hot as it was in 2006 owing to a bumper crop, some industry players expect.
“Tea prices are likely to ease during 2007 due to expectation of a bumper crop in India and overseas compared to the previous year,” said B.P. Singh, Beeyu Overseas Ltd chairman and managing director.
He remained optimistic, however, that the price correction due to increase in volume would be not more than 4-5% than the ruling average prices.
“This year we have had good rainfall and the February rain will help production. Our tea-processing factories are opening from tomorrow as green tea leaves will start coming in from March,” he added.
Singh said production in Africa would also shoot up, as after a slump of production by 15-20 million kg in 2006, this year the crop would be better.
“With global demand growing by just 1-2% any bumper crop will pull down prices,” Singh said.
The average tea price had firmed up by 8-10% in 2006 over the previous year.
Besides Kenya and Sri Lanka as major competitors, China is also fast gaining market share. Being mainly an exporter of green tea, it has not yet hurt Indian interests.