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Global tea prices likely to rise with drop in production

18 Apr 2012 Evaluate

Tea prices are likely to rise given the fall in production in the major tea producing countries such as India, Kenya and Sri Lanka. Persistent dry weather conditions in these countries are expected to result in tea prices staying higher in 2012. It is further reported that the production in Kenya and Sri Lanka has been badly affected by the dry weather.

According to India's Tea Board, India's tea production in January has dropped to 18.69 million kg from 20.93 million Kg last year. The demand for tea on the other hand has risen as Pakistan plans to double its imports from India. Given the situation, the price of tea, which has risen by Rs 25-40 a kg in India is expected to rise further.

India is the second largest producer of tea after China and produces all the three types of tea CTC tea, Orthodox tea, and Green tea. Moreover, India is the fourth largest exporter of the commodity after Kenya, China, and Sri Lanka. India's tea production for 2011-12 is expected to be around 988 million kgs.

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