INDIA: Tea Exports to Decline by 13 Million Kgs in 2012

MUMBAI (NNN-Bernama) -- Continuing financial crunch in western countries is likely to cause a dip in India's tea exports this year, according to a recent industry study.

Tea exports would see a decline of 13 million kgs to reach 180 million kgs in 2012, a decrease from 193 million kgs last year, the study by ICRA Management Consultancy (IMaCS) said.

"Weaker world growth outlook, continuing high tea prices and recent sharp decline in coffee prices will result in marginal decline in India's tea exports from 193 million kgs to 180 million kgs this year," Press Trust of India quoted the study.

The fast growing coffee market is also a factor that adversely affects tea consumption in Europe, and tea export to Iran could decline due to sanctions imposed by the United States and European Union, the study said.

Decrease in tea exports could also be attributed to the expected decline in domestic production during 2012 and increase in domestic consumption, it said.

India's tea production fell 11.4 per cent in the first five months of 2012.

Production has been experiencing a downward trend since October 2011 and it became severe in March and April this year.

While production in north India decreased 12.2 per cent during the first five months this year, it was down by 10.2 per cent in the south.

India's tea consumption also increased by 2.3 per cent in 2011, with growth forecast to be marginally lower at 2.2 per cent in 2012 due to slowed economic growth and recent increase in prices of tea and milk, the study said. --NNN- BERNAMA