India will set a new record for tea production for 2016 at 1.22 billion kilos but 
continues to surrender market share in global exports. Despite increases in production, the quantity of tea sold at the Kolkata Auction dipped 3.9% to 120.8 million kilos in 2016 compared to 2015.
Exports for the first eight months of the year totaled 141 million kilos, down by 10 million kilos and unlikely to reach the 250 million kilos of tea exported in recent years. Pakistan, one of India’s top trading partners, purchased more than 100 million kilos of rival Kenyan tea for the first time last year. India’s exports to Pakistan dropped by 6 million kilos.
India is the fourth largest exporter of tea in the world, with 12% market share in 2015. Kenya exports 25% of the world’s tea.
India enjoys one of the most expansive domestic markets for tea, which limits tea available for export, but the greater challenge in 2016 was pricing. Demand for lesser-quality cut, tear, curl (CTC) increased while sales of better-quality offerings were stagnant throughout the year, according to tea company executives.
Overseas markets generally prefer higher-quality teas such as Darjeeling. But supplies of Darjeeling were limited by bad weather to an estimated 8.1 million kilos and with domestic demand increasing, there wasn’t much to auction.
Arun Narain Singh, managing director and chief executive officer of Goodricke Group, which owns 30 tea gardens, told The (Calcutta) Telegraph that “prices for both CTC and Darjeeling teas were down in 2015.” He said the average price of INRs 325.32 ($4.80) per kilo “is nowhere near our cost of production for Darjeeling, which has increased by at least INRs 25–30 (37–44 cents per kilo).”
In 2015, the price of CTC teas averaged $1.49 per kilo.
Rival Kenya, which enjoyed a good crop year, is exporting black tea equal to India’s CTC at prices 34% lower than India exporters. Azam Monem, chairman of the Indian Tea Association told The Economic Times that Indian teas are being offered at $3.07 kg compared to $2.29 kg for a Kenyan equivalent. Meanwhile, the cost of producing tea in India has increased by 8–10% in 2016, according to Monem.
The International Tea Committee (ITC) data shows that China and India far outpace all other tea-growing nations, producing 85% of the world’s tea last year. China reports that the country produced 2.397 billion kilos in 2016, up from 2.277 billion in 2015—almost 300 million kilos greater than 2014. The increase in tea produced in China in the past few years is nearly equal to all the total tea grown in Sri Lanka. Output from all the countries of Africa combined was 607 million kilos, about a quarter of the volume of tea grown in China.
Sources: Times of India, Economic Times, The (Calcutta) Telegraph, Tea Board of India
continues to surrender market share in global exports. Despite increases in production, the quantity of tea sold at the Kolkata Auction dipped 3.9% to 120.8 million kilos in 2016 compared to 2015.
Exports for the first eight months of the year totaled 141 million kilos, down by 10 million kilos and unlikely to reach the 250 million kilos of tea exported in recent years. Pakistan, one of India’s top trading partners, purchased more than 100 million kilos of rival Kenyan tea for the first time last year. India’s exports to Pakistan dropped by 6 million kilos.
India is the fourth largest exporter of tea in the world, with 12% market share in 2015. Kenya exports 25% of the world’s tea.
India enjoys one of the most expansive domestic markets for tea, which limits tea available for export, but the greater challenge in 2016 was pricing. Demand for lesser-quality cut, tear, curl (CTC) increased while sales of better-quality offerings were stagnant throughout the year, according to tea company executives.
Overseas markets generally prefer higher-quality teas such as Darjeeling. But supplies of Darjeeling were limited by bad weather to an estimated 8.1 million kilos and with domestic demand increasing, there wasn’t much to auction.
Arun Narain Singh, managing director and chief executive officer of Goodricke Group, which owns 30 tea gardens, told The (Calcutta) Telegraph that “prices for both CTC and Darjeeling teas were down in 2015.” He said the average price of INRs 325.32 ($4.80) per kilo “is nowhere near our cost of production for Darjeeling, which has increased by at least INRs 25–30 (37–44 cents per kilo).”
In 2015, the price of CTC teas averaged $1.49 per kilo.
Rival Kenya, which enjoyed a good crop year, is exporting black tea equal to India’s CTC at prices 34% lower than India exporters. Azam Monem, chairman of the Indian Tea Association told The Economic Times that Indian teas are being offered at $3.07 kg compared to $2.29 kg for a Kenyan equivalent. Meanwhile, the cost of producing tea in India has increased by 8–10% in 2016, according to Monem.
The International Tea Committee (ITC) data shows that China and India far outpace all other tea-growing nations, producing 85% of the world’s tea last year. China reports that the country produced 2.397 billion kilos in 2016, up from 2.277 billion in 2015—almost 300 million kilos greater than 2014. The increase in tea produced in China in the past few years is nearly equal to all the total tea grown in Sri Lanka. Output from all the countries of Africa combined was 607 million kilos, about a quarter of the volume of tea grown in China.
Sources: Times of India, Economic Times, The (Calcutta) Telegraph, Tea Board of India