Tea Production From India Drops 12% as Pest Attack Damage Crop, Board Says

Tea production in India’s biggest growing region dropped 16 percent in June after pest attacks damaged the crop, the state-run Tea Board said.

Output in the northern region, which accounts for more than two-thirds of the total, declined to 76.8 million kilograms from 91.9 million kilograms a year ago, the board said on its website today. Production grew 4.5 percent to 212.3 million kilograms in the six months ended June 30, it said.

The harvest in Assam, which accounts for more than half of India’s production, may drop by as much as 40 percent during the so-called second flush, Tea Board Chairman Basudeb Banerjee said last month. The crop in the northeastern state shrunk 20 percent in June to 50.7 million kilograms from a year ago, data from the board show. The second flush pickings are typically the best- quality leaves that fetch a premium from buyers overseas.

Prices at auctions in the northeast states climbed as much as 15 rupees a kilogram in the first two weeks of July because of the damage, according to the board. North Indian tea fetched an average 99.2 rupees per kilograms, compared with 95.60 rupees a year earlier, according to the board.

McLeod Russel India Ltd., the world’s biggest tea producer, gained 1.9 percent to 236.25 rupees, the highest level in more than three months. Jayshree Tea & Industries Ltd. rose as much as 1.1 percent to 318.75 rupees.

Countrywide production dropped 12 percent in June to 104 million kilograms, the board said. Still, output in January to June totaled 339 million kilograms, compared with 333.9 million kilograms a year ago, the board said. Exports climbed to 83.9 million kilograms, valued at 10.4 billion rupees.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net

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