New Delhi, Aug 17, IRNA -- India's Tea exports are likely to decline by 13 million kilograms this year due to struggling global economic scenario, continuing high prices and recent decline in coffee prices, according to an industry study conducted by ICRA.
'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 kilograms to 180 million kilograms in 2012,' ICRA Management Consultancy (IMaCS) said.
It said this may result in decline in tea production this year and prices of the commodity may also become dearer.
According to the study, the faster-growing coffee market, which is adversely affecting tea consumption in Europe, is also one of the main reasons affecting the exports.
The fall in tea exports could also be attributed to the expected decline in domestic production during 2012 and increase in domestic consumption, the report stated.
India's tea production came down by 11.4 percent in the first five months of 2012.
Production has experienced a downward trend since October 2011, with especially severe declines in March-April 2012, PTI news agency reported. While production in north India came down 12.2 percent during the first five months this year, in south India was down by 10.2 percent.
Overall, domestic production is forecast to decline to around 950 million kilograms this year, the IMaCS report on Indian tea industry said.
Meanwhile, India's tea consumption increased 2.3 percent in 2011, with growth forecast to be marginally lower at 2.2 percent in 2012 because of slowing economic growth and recent increase in prices of tea and milk.
Over the long-term, tea is also expected to face increased competition from coffee.
Globally growth in tea supply is expected to be low in 2012-13, following the marginal increase in surplus during 2011, it pointed out.
For 2012 as a whole, the output is expected to decline in India and Kenya, while there will be marginal increase of only 4-5 million kilograms in Sri Lanka.
As a result, total output is forecast to increase marginally by 2 percent this year.
World tea consumption is likely to increase at 2.9 percent in 2012.
Having risen to an all-time record in 2011, average world tea prices are expected to increase to USD 3 per kilogram this year from USD 2.92 per kilogram last year.
India is one of the largest tea growers in the world. However, over 70 percent of it is consumed by Indians themselves. The production of tea really took off during the days of British rule in India, when large tracts of land were converted for mass tea production. Darjeeling, Assam, Munnar, Nilgiri Mountains and Wayanad are famous for tea plantations in India.
