India’s Domestic Consumption

MUMBAI, India – Thanks to the Herculean efforts of India’s small tea growers, the country is quickly closing in on China as the world’s largest tea producer.

thumb_seal_india_tea_140px.pngThe Indian Tea Association proudly declared this week that overall production grew by 6.5 percent last year for a record 1.2 million metric tons of tea. Small growers contributed more than 30% of the total according to India Tea Board estimates. China produced 1.75 million metric tons in 2012 and is expected to produce about 1.3 million metric tons in 2013 but an official total has not been released.

The production increase had little impact on exports however as the majority of this tea was CTC grade and virtually all was consumed by the fast-growing domestic market. India exports CTC mainly to Egypt, Pakistan and the U.K. with orthodox production to Iraq, Iran and Russia. North America is generally the fifth or sixth largest ranked export destination but demand here continues to increase.

Domestic consumption reached 856 million kilos in 2011 and 875 million kilos in 2012. Final numbers are not available but the Tea Board estimates consumption will top 880 million kilos. Growth continues at 2% to 3% annually which will mean India will have to begin importing tea to meet its domestic demand and maintain export targets. Per capita consumption rose to 718 grams (1.58 pounds) in 2011, about triple the U.S. Domestic consumption is rising steadily from a per capita count of 654 grams (1.44 pounds) in 2001.

Assam continues to lead the nation’s five growing regions with an April-December harvest of 607 million kilos, up 5% compared to the previous year. West Bengal tea growers increased yield by 11% to 290 million kilos according to Tea Board data.

The southern growing regions of Tamil Nadu, Kerala and Karnataka showed a 16% increase for the period to 196 million kilos.

Sources: Economic Times the Business Line and China Daily

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