According to a statement by Peter Mathias, the chairman of the United Planters Association of Southern India (UPASI), bad weather is affecting tea production in the South of India for the fourth year in a row. Sales of orthodox teas have plummeted by more than 17% as a result of a sharp drop in supply in the orthodox category.
However, such development has had a somewhat positive effect on the realization price, which averaged 71.17 rupees (US$1.56) per kilogram in the period from January to June 2011, 1.92 rupees (US$0.04) higher than over the same period last year.
Quantity sold at auction centers in South India was also higher by 2.3 million kilograms compared to 2010.
A positive development is that the price increase that is evident in spite of lower exports from India (16.2 million kilogram) can be attributed mainly to domestic demand for CTC teas, since domestic demand for CTC teas is traditionally more stable and exports to the West Asia and the North Africa region are expected to pickup in the second half of 2011.