East Java - Tea estates

Note the last sentence . This is the sign board at the Yogjakarta airport

In Jakarta. They call it 'Suharto's last erection'

Market Scenario - Indian Tea Industry

Market Scenario - Indian Industry
National Scenario
Internal consumption has grown from 785m in 2006 to 810m in 2007. This means a growth of 25million kgs YOY (year on year). This rate of increase in consumption (if it can be sustained) will change the whole scenario.
Crops are not going to exceed 1000m over the next 7 years because of the following reasons:
a) The STG sector has almost peaked. The area under tea is not increasing significantly.
b) The organized sector’s crop has been on a slow decline. There is nothing being done different to expect a change in this trend.
c) The thrust on quality will possibly reduce crops as a whole.
d) Labour constraints, specially in South India, will adversely affect development work & crop
e) The increase in Orthodox will mean net reduction in ‘cuppage’ (Ortho vs CTC is 250 vs 500). This in itself will reduce available / real ‘cuppage’.
Production - 960 m
Consumption: estimated as of 2007 -
Internal - 810 m
Export - 170 m
TOTAL - 980 m
So there is already a shortage of 20 m. Where will YOY increase of 25 m come from?

International Scenario
There is likelihood of reduction in exports – with this shortages in supply the demand will increase & the internal prices will rise - higher that what export markets will provide for similar teas.
This will encourage the quality producers to sell internally & the poorer teas will languish in India as there will be no export demand for them.
Under WTO the import duty will have to be lifted on tea (within 2 years or so) and this will be the biggest threat to the industry. Low cost producers (China, Vietnam, etc) will price out the poorer teas out of the internal market.