Tea exports from India, the world’s largest producer, may rise 28% this year after drought cut output in Kenya and Iraq renews purchases.
Overseas sales may top 200 million kg, compared with 156.7 million kg last year, Basudeb Banerjee, chairman of the state-run Tea Board of India said on Thursday. Production may rise 1.6% to 960 million kg on good rains.
Higher exports may cut domestic availability and drive up costs for packaged tea sellers such as Tata Tea Ltd and Hindustan Unilever Ltd.
Tea prices at Indian auctions gained an average 10% in the first four months of this year because of rising exports and local demand.
“Things are once again really looking up for Indian exports,” Banerjee said. “Overall world supply situation has been affected by the drought and political turmoil in Kenya,” he added.
Tea production in Kenya, the world’s biggest exporter of black tea, fell 35% to 70 million kg after hot and dry weather damaged crop, the Kenya Tea Board said in April.
Exports to Iraq, India’s biggest buyer of tea in 2006, may rebound this year after exporters resolved issues related to payments, Banerjee said. Sales to Pakistan and Egypt were also expected to increase, he said. Exports climbed 3.4% from a year ago to 55.1 million kg in the four months ended 30 April, according to the Indian Tea Association.