Drought to hit tea output in Assam, West Bengal

Tea Production in North India covering Assam and West Bengal for 2012 is set to register a sharp drop due to a prolonged dry spell and rising temperature across Assam and West Bengal. The crop loss is set to lead to cash flow problems for the tea companies. Data compiled by the Indian Tea Association confirm rainfall deficit for West Bengal at around 31-42 per cent during January-March 2012 as compared to the same period in 2011. Upper Assam estates in the South Bank of the Brahmaputra are also experiencing severe drought conditions with rainfall deficit of 45 per cent in Dibrugarh and Tinsukia Districts and around 38 per cent in Golaghat. Assam and West Bengal together account for 75 per cent of Indian tea output. Crop is estimated to drop by around 60 per cent till March as compared to 2011. The crop in Assam and West Bengal up to March 2012 can, therefore, at best touch 20 million kg as against 46 million kg recorded in the corresponding period in 2011. This dry spell would, undoubtedly, have an adverse impact on the premium first flush. The decline in production is also evidenced by a drop in the fresh arrivals at the auction centres of West Bengal and Assam. Arrivals in West Bengal are 25 per cent lower, while in Assam, the drop is by 50 per cent. The tea industry closed 2011 at a level of 988 million kg with prices averaging at around 2010 levels for both Assam and West Bengal. Besides severe cash flow problems, the likely drop in production due to abnormal weather conditions would result in significant revenue loss which will not be compensated by higher prices. Erratic rainfall patterns are compelling the industry to invest in improving irrigation infrastructure in tea estates. Cost of providing such infrastructure has been estimated at around Rs.7 lakh per hectare. The CCPA has requested the Tea Board and the Ministry of Commerce for a standalone scheme to support irrigation under the XII Plan