The trend of Sri Lankan orthodox tea production going down is likely to help South Indian crops even more since exporters think there is enough room to get into many different markets around the world.
Crop data from Kochi tea auctions showed that Sri Lankan orthodox tea production fell by 35 million kg from January to July, to 153 million kg, compared to 188 million kg during the same time last year. Traders said that this is a big drop in the island nation’s tea production and that it is likely to drop even more in the coming months.
Even though the country next door has started to fertilize the crop, it will still take some time for production to get better. Also Read | Sri Lankan tea trade does not anticipate any immediate threats to its operations.
They also said that this difference is a good sign for the spread of South Indian orthodox teas around the world. A leading tea exporter in South India told, ‘Most of the time, only orthodox teas can replace orthodox teas.’ Demand for orthodox teas has gone up everywhere, so now is the time to make high-quality teas that can sell for good prices. North Indian tea production is likely to stop in the next two months when the festival season starts. This will make the demand for South Indian orthodox leaves even higher.
‘But the million-dollar question is, are we ready to meet the needs of the world market?’
Manufacturers not equipped
India can’t make more than 35 million kg of orthodox tea because its manufacturing units can only make so much. Because it costs a lot of money, factories are not set up to make two things at once. Also, India has always used CTC, and the market is able to easily take up 80% of the country’s consumption.
At the moment, some big tea companies that have two places where they make tea are benefiting from the situation. The exporter said that most of these companies are not focusing on conversion because CTC dust sells for more money.
But last week’s rains kept people from coming to sale 34 in Kochi, where only 2,47,291 kg were offered. Even though there was a fair amount of interest, Forbes, Ewart & Figgis said that only 73% of the items were sold.
An exporter from Kochi said that Iran was the main buyer of high-quality teas, and the trade expects that the rains from last week will cause the next shipments to have less stock.
Also Read | Sri Lanka is optimistic that the use of fertilizer will increase Tea productivity.
But rising tea prices in India have started to hurt exports, especially to smaller countries that have traditionally bought Indian tea, he said, adding that inflationary pressure and fears of a recession may be to blame for the drop in demand.
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