April 23, 2021
The Indian tea industry fear that the surge in coronavirus infections and the resultant lockdown-like curbs in Maharashtra, Gujarat and Delhi will slow down domestic demand in the first quarter of the current fiscal.
The northern and western states of the country are the major markets for tea consumption.
On the export front too, India’s tea business is facing challenges due to over-production in Kenya, India’s competitor in the world’s tea markets. Kenya is exporting teas at cheaper rates, which is less than $2 per kg.
Lockdowns and stricter restrictions have been put in place by many of states. If the number surges and if there is a longer duration of lockdowns, the movement of tea will slow down. The only silver lining is that at-home consumption will go up. In that case, the first quarter sales may get impacted. However, we are hopeful that as the vaccination drive picks up, the situation will improve. Also, since the state governments are putting in stricter Covid protocol, cases will start coming down.
Besides the impact of Covid-19 pandemic, tea growers and traders are worried about less rainfall in the months of March and April. Normally, the tea estates receive 3-4 inches of rainfall in these two months, when first flush teas are grown. But this time, the tea-growing areas have received just 1-2 inches of rain.
There has been a hail storm too. The crop will be down by 15% in the March- April period. If the weather improves, then this crop loss will be. In 2020, tea garden operations were affected due to the lockdown, which resulted in a significant drop in tea production in March and April.
Vivek Goenka, chairman of the Indian Tea Association is hopeful that exports will be more than last year. Last year, India had exported 207 million kg of teas.