NAIROBI: Lagging rains, output and demand were just some of the things worrying Bidyananda Barkakoty, a small tea garden owner in a northeastern Indian state, until about a month ago. A recent dry spell in distant Kenya has since given him a reason to smile.
Barkakoty is hoping the crop-damaging drought in top tea exporter Kenya will open a window of opportunity for Indian planters like him as rains improve output prospects at home. Industry sources are projecting a rise of about a tenth in exports this year from India, the world’s No. 2 tea producer.
“The shortfall in Kenyan production is pushing up prices there and it will start reflecting in the Indian market in coming months,” Barkakoty said.
The hope that export revenues will soar as tighter Kenyan supplies boost prices have started filtering down to the share prices of Indian tea firms, such as McLeod Russel, Jay Shree Tea & Industries and Harrisons Malayalam, which have surged 10-14 percent so far this month.
McLeod Russel’s chief financial officer, Kamal Baheti, expects India’s overseas tea sales to rise by 15-20 million kg (33 million-44 million pounds) in 2015, as dry weather drags down production in Kenya from a record high of 444.8 million kg in 2014.
“We will regain lost quantity this year,” Baheti told Reuters, referring to the 8.2 percent drop in the country’s exports to 201 million kg last year. “This year, since Kenya has been hit by drought, global and local prices will improve.”
