Tea prices at various auction centres in the country have fallen in recent months. Prices are not keeping pace with the rising production costs in the sector. As a result, the industry is currently experiencing a crisis of sorts.
Average tea prices, which stood at 268 per kg in the July- September quarter of the last fiscal year, have fallen to 224 per kg in the same period of the ongoing fiscal year. Furthermore, the price trend remains unfavourable as of October. The gap between tea prices and the cost of production has been rising over the last few years. According to the trade body, the Indian Tea Association, tea prices in North India have grown at a compound annual growth rate (CAGR) of just 4% since 2014, while costs of vital inputs like coal, gas, and sulphur have grown at a CAGR of 9% to 12%.
To make matters worse, the demand scenario, both domestically and in exports, has been weak. Domestic demand accounts for approximately 80% of the sales volume in the sector, with the remaining 20% attributable to exports. Annual tea production in India totals around 135 crore kilograms. The Indian tea market in estimated to be worth 35,000 crore, with the branded business constituting more than 70% of the overall market.
MARGIN PROFILE
The main tea-growing regions are divided into North India (NI), primarily encompassing Assam and West Bengal, and South India (SI), which includes Kerala and Tamil Nadu. Approximately 80% of Indian tea is produced in North India.
Denne historien er fra October, 2023-utgaven av Beyond Market.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra October, 2023-utgaven av Beyond Market.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
PRUDENT PRACTICES
Banks worldwide navigate a complex balancing act, steering economies toward growth while safeguarding financial stability through thoughtful management of interest rates and credit risks
RETAIN ROULETTE
Inexperienced investors spin the market wheel, chasing dizzying valuations and risking a bubble burst
UNRAVELED THREADS
Bangladesh's crisis disrupts global textiles, offering India a potential opportunity, but production constraints limit its gains
PASSING THE BATON
Succession planning helps ensure uninterrupted leadership
RISKY BUSINESS?
SEBI's efforts to protect retail investors from derivatives market risks could inadvertently dampen market volumes
INFLATION-PROOF YOUR CHILD'S FUTURE
Inflation might be stealing your child's future, but children's mutual funds can be their superhero
EMBRACE UNCERTAINTY, SAYS MARKS
Howard Marks urges investors to embrace uncertainty, long-term thinking, and focus on controllables, shunning in his memo “The Folly of Certainty”
IMPORTANT JARGON
70% OF INDIVIDUAL INTRADAY TRADERS IN THE EQUITY CASH SEGMENT MAKE LOSSES, FINDS SEBI STUDY
AN ASCENT T'O NEW HEIGHTS
The IMF predicts India's economy to reach 55 trillion by 2047, driven by various economic indicators showing positive growth and government initiatives
CARRY TRADE CRASH: GLOBAL MARKETS REEL
Japan’s Policy Shift Sends Shockwaves Through Global Markets, Including India, as Yen Carry Trade Disintegrates