Corporate banking: tea industry; Citibank N A

Abstract

The revised estimates for total production in 1992 was set at 2446 MM kgs and the actual figure was 2411 MM kgs, about 5% lower than the last year’s figures. 1993 was a good year for tea and the world output is estimated at 2617 MM kgs. Almost all companies recorded increased production in 1993. India recorded a 7.67% rise, Sri Lanka recorded a 29.6% rise and Kenya recorded a 12.2% rise in production levels as compared to the previous year. World exports rose by 8.5% to 1094 MM kgs in 1993. The average London auction prices rose to 125.8 pence from last year’s 113. pence. India’s production in 1993 was a record 758 MM kgs. North India produced 579 MM kgs, a rise of 6.2% whereas South India produced 179 MM kgs, a rise of 12.6% from 1992 figures. The average auction prices rose by 26% to Rs. 48.95/kq in 1993. 1994 began on a depressing note for the tea industry with the results of the first quarter showing falling prices at auctions by around 20% compared to last year. The produce has been 56.7 MM kgs, a fall of 8% from last year’s crop of 61.3 MM kgs for the corresponding period. This was witnessed primarily due to offloading of excess stocks held by companies last year in anticipation of better prospects, low quality tea sent to auctions and reduced foreign buying, specially Russia. The market is expected to pick up around mid May with the fire flush teas entering the market. On the exports front, the performance was same as last year with a total exports of 173 MM kgs. Russian buying increased by 38% to touch 62 MM kgs in 1993. Exports to the Middle-East, specially Iran and Egypt declined considerably to wipe out the advantages of increased Russian offtake. The estimates for 1994 exports has been set at 190- 200 MM kgs and the expected offtake of Russia is about 70-75 MM kgs.