The year 2020 had ignited hopes for growers of plantation commodities with prices showing an increase with volatility. However, the positive trends were dampened towards the year-end on account of uptrends in the supply side.
Tea prices were on the rise since July due to supply issues, which were considered as a requisite for the sustenance of the sector. Domestic tea prices from January to November period at auctions, especially South India, was higher by ₹28.96 per kg at ₹130/kg, while North Indian price was up by ₹54.75 at ₹207.59 as compared to same period last year.
However, in the last few auctions sales, there was a free fall in prices and quantity sold. The latest prices are not significantly different from the corresponding period of last year.
C Shreedharan, Chairman, Upasi Tea committee, attributed the reason for the fall to increase in wages on account of revision in DA in every quarter and the rise in input costs. This could be an indicator that the year 2021 may be a challenging one.
Production shortfall
There has been a severe shortfall in production. Black tea production globally is estimated to be lower by around 100 million kg (92.45 million kg till October), largely due to decline in India (by 151.60 million kg) and Sri Lanka production (by 29.50 million kg), despite the huge increase in the crop from Kenya.
The decline in Indian tea production was mainly in North India (152.24 million kg), while South India reported more or less the same crop as on date. Exports were affected due to pandemic-related logistics issues and a tough competition posed by Kenya, which was offloading its tea at a very competitive price given its huge production and export surplus.
Low coffee demand
Coffee is an export commodity with more than 75 per cent of production being shipped. The second wave of the Covid-19 in Europe in early 2021 is a matter of concern, as the demand of the beans in the major consuming destinations may get affected due to lower out-of-home consumption.
The ICO indicator price as on December 11 was 156.15 cents/lb for other milds as against ₹157.11 cents/lb during the corresponding period last year. For Robustas, prices were 71.13 cents/lb against 73.22 cents/lb.
The farm gate price for Arabica parchment is currently at around ₹10,175 for 50-kg bag and Robusta Cherry is at ₹3,263 for 50-kg bag compared to ₹8,288 and ₹3,350, respectively.
Jeffry JS Rebello, Chairman, Upasi Coffee committee, said that any futuristic outlook for Indian coffee, a principal export product, is dependent on international demand. Currently, things are looking fluid with the reports of a plausible third wave of the pandemic in Europe.
This article is auto-generated by Algorithm Source: www.thehindubusinessline.com
