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The Economic Times

'Tea prices to go up by Rs 12-14 per kg'

GUWAHATI: Retail equity research firm of ICICI has predicated increase in the tea prices by at least Rs 12-14 per kg during 2012.

According to the research, the Indian tea industry is witnessing a continuous rise in the realization of tea prices owing to growing consumption demand and a shortfall in production.Simultaneously, a significant dip in global production, especially Kenya, the Indian Tea companies fetched attractive prices from exports.

It is predicated," The demand for tea will continue to rise and production in India to remain at current levels, tea prices could further inch up benefiting some tea companies."

India produced 988.3 million kilograms (mkg) of tea in 2011 (up by 2.3%). Production in Kenya and Sri Lanka, the largest exporters, stood at 377 mkg and 328.6 mkg.

Exports from India during 2011 stood at 192.9 mkg against 222.0 mkg 2010.The research noted the tea companies in India would benefit substantially from the perking consumption demand for Indian tea in the global markets, especially Dubai, Pakistan and European countries. Darjeeling tea which is a premium quality tea in the world would be the leading beneficiaries.

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