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India records all-time high tea production

India, the world's largest tea producer, produced a record 928 million kg in 2005 compared to 820 million kg in 2004.

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GUWAHATI: India's tea production recorded an all-time high last year with the beleaguered industry showing signs of resurgence.

India, the world's largest tea producer, produced a record 928 million kg in 2005 compared to 820 million kg in 2004.

"The tea industry is looking up with prices in the auctions beginning to increase and the overall mood being positive," said Dhiraj Kakati, secretary of the Assam chapter of the Indian Tea Association, the country's apex tea administration body.

Assam is considered the heart of India's tea industry, with the northeastern state accounting for about 55 per cent of the country's total production.

"Favourable weather conditions and a large number of small tea growers beginning to cultivate the crop are cited as factors for the quantum jump in tea production, which is India's highest ever," Kakati said.

India's $1.5 billion tea industry had been facing a crisis with prices dropping in the weekly auctions since 1998. But of late prices are beginning to firm up.

A kilogram of good quality Assam tea sold at Rs.70 in the auctions last week. Last year, the average price in the auctions was Rs.62 a kg.

"This trend is good as prices in the auctions in the last five years had dipped to as low as Rs.58. The increase in prices is due to very good quality tea that we have produced," said an official at the Tea Auction Centre in Assam's main city of Guwahati.

India's domestic tea consumption, which remained stagnant for over a decade, shot up from 630 million kg to an estimated 733 million kg last year.

"The healthy domestic consumption apart, the other aspect to cheer about is that the crashing prices in the auctions were beginning to firm up," said B. Sharma, a planter in Assam.

Tea exports, however, slipped from 190 million kg in 2004 to 180 million kg last year.

The slump in prices and exports was largely attributed to cheap and inferior quality teas produced by many new tea-growing countries, thereby pushing premium quality Indian teas to stiffer competition in the global market.

Faced with crashing prices, a glut in the market and falling exports, the Indian government announced a whopping Rs.50 billion package to boost the sagging industry.

"The financial package is being planned for a period of 15 years aimed at rejuvenating tea plantations by way of quality improvement and plans to further market the beverage in new countries," Kakati said.

Up to 70 plantations in Assam had closed down in recent years, unable to sell their produce with exports dropping and domestic consumption remaining stagnant.

"Now things are beginning to look good and we hope this positive trend continues despite exports falling," said N. Bora, a senior planter.

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