FAITTA AGM – 28th Aug, 1

Global Tea Market Review

FAITTA – 28th Aug, 2010 New DelhiSACHEN VERMA

Senior Vice President Marketing – JV Gokal & Co. Pvt Ltd

GLOBAL BLACK TEA PRODUCTION

• From the global perspective, World tea output has significantly recovered from lower production trend occasioned by drought experienced across the major tea producing countries in 2009 and 2008

• For the period up to May 2010, the three key producers of Black tea (India, Kenya and Sri Lanka), which account for about two-thirds of the world’s Black tea production, registered increased production of 115 Million Kgs compared to the same period of last year

• Kenya accounted for the highest increase of 61% (69 Million Kgs), while Sri Lanka registered an increased production of 25% (26.9 Million kg)

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Major producing countries( Jan to June’10 )

COUNTRY

2010 2009 [+/-] mkgs 2010 2009 [+/-] mkgs

Bangladesh 6.30 6.70 -0.40 13.81 14.34 -0.53

India 104.04 118.05 -14.01 338.97 333.90 5.07

Kenya 29.82 25.34 4.48 213.01 139.28 73.73

Sri Lanka 29.50 20.50 9.00 166.90 132.20 34.70

Combined 169.66 170.59 -0.93 732.69 619.72 112.97

COMPARATIVE GLOBAL CROP : JUNE

During June Upto June

World Crop

Auction Prices for tea Across Major Tea Producers (USD/Kg)

Period To Date 2010

To Date 2009

% Variance

Kenya June 2.60 2.23 17 %

Sri-Lanka June 3.24 2.82 15%

India June 1.99 1.95 2 %

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MOMBASA AUCTIONS( Weekly Price comparison )

MOMBASSA AUCTION AVERAGE

150

170

190

210

230

250

270

290

310

330

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Week

US

Cen

ts /

Kg

2008

2009

2010

KENYA EXPORTS (Jan-June 10)Destination Quantity in Million Kg

EGYPT 49 m KgUK 38 m Kg

PAKISTAN 31 m KgAFGHANSTAN 29 m Kg

SUDAN 13 m KgUAE 9.50m Kg

RUSSIA 7.4 m Kg

KENYA PRODUCTION (Jan-June)

2006 2007 2008 2009 20100

50

100

150

200

250

134.1

198.7

157.3139.2

213.0

YearProd

uctio

n (M

illio

n Kg

s)

SRI LANKA PRODUCTION

SRI LANKA CROP FOREACAST

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COLOMBO AUCTIONS( Weekly Price comparison )

SRILANKA AUCTION AVERAGE

200

250

300

350

400

450

500

Week

Cen

ts /

Kg 2008

2009

2010

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World Auction Average

Currency 2010 2009 +/- 2010 2009 +/- 2010 2009 +/-

INR 118.82 108.47 10.35 118.82 108.47 10.35 2.6 2.21 0.39

INR 97.82 102.21 -4.39 97.82 102.21 -4.39 2.14 2.08 0.06

INR 75.49 86.85 -11.36 75.49 86.85 -11.36 1.65 1.77 -0.11

BDT 172.97 128.41 44.56 114.19 91.62 22.57 2.5 1.86 0.63

US Cents 186.21 161.83 24.38 85.15 79.6 5.55 1.86 1.62 0.24

US Cents 278 243 35 127.13 119.53 7.6 2.78 2.43 0.35

US Cents 162.53 148.35 14.18 74.32 72.97 1.35 1.63 1.48 0.14

SL Rs 370.09 324.6 45.49 148.41 139.94 8.47 3.25 2.84 0.4

India Bang SL

Jan-Jun US$ 1 = 2010 45.73 69.27 114.04

2009 49.19 68.94 114.1

                                  January to June         (per Kg)

Centre

In Countrywise Currency In INR (Approx.) In US $ (Approx)

(approx)

WORLD AVERAGE TEA AUCTION PRICES

Kolkata

Guwahati

Cochin

Chittagong

Jakarta

Mombasa (Kenya)

Limbe

Colombo

Exchange Rates :

Auction Average

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India - Production ( Crop Jan – June )

Price outlookCrop 2010

District / States2010 2009 [+/-]mkg [+/-]% 2010 2009 [+/-]mkg [+/-]%

Assam Valley 47.20 59.10 -11.90 -20.14 122.60 132.60 -10.00 -7.54Cachar 3.50 4.50 -1.00 -22.22 15.10 16.50 -1.40 -8.48Total Assam 50.70 63.60 -12.90 -20.28 137.70 149.10 -11.40 -7.65Darjeeling 1.20 1.10 0.10 9.09 3.60 3.70 -0.10 -2.70Dooars 15.90 16.70 -0.80 -4.79 45.50 44.40 1.10 2.48Terai 8.30 9.50 -1.20 -12.63 23.80 23.10 0.70 3.03Total West Bengal 25.40 27.30 -1.90 -6.96 72.90 71.20 1.70 2.39Others 0.70 0.90 -0.20 -22.22 1.70 2.10 -0.40 -19.05Total North India 76.80 91.80 -15.00 -16.34 212.30 222.40 -10.10 -4.54Tamil Nadu 20.80 18.20 2.60 14.29 89.80 76.90 12.90 16.78Kerala 6.00 7.40 -1.40 -18.92 33.70 31.80 1.90 5.97Karnataka 0.50 0.60 -0.10 -16.67 3.10 2.70 0.40 14.81Total South India 27.30 26.20 1.10 4.20 126.60 111.40 15.20 13.64Cumulative Total 104.10 118.00 -13.90 -11.78 338.90 333.80 5.10 1.53

During June Upto June

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Production comparison ( India crop Jan – June )

Crop

Variance %

Region 2010 2009 2008 2010/2009 + / (-)

North India 212.3 222.4 225.9 -10.1 -4.5

South India 126.7 111.4 119.7 15.3 13.7

All India 339.0 333.8 345.6 5.2 1.6

* Qnty. in mil. Kgs

0 50 100 150 200 250

2010

2009

2008

South India

North India

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2010 – Auction Prices ( North India )

Price outlook

Months * CTC leaf & all Dust

2010 2009 2008 2007

Jan 98.45 87.98 72.20 63.80

Feb 94.07 81.35 63.72 59.18

Mar 79.41 78.01 62.29 61.19

Apr 106.56 115.96 97.46 81.82

May 113.55 133.48 91.14 73.95

Jun 116.66 127.10 101.02 82.79

Jul 118.77 112.92 92.90 77.38

Aug 116.00 115.05 94.57 71.61

Sep 114.00 115.10 103.90 74.96

Oct 112.00 120.06 105.58 72.82

Nov 115.00 121.61 100.03 74.43

Dec 113.00 114.05 94.18 78.45 * Estimates for Aug to Dec'10

North India ( Auc.Avg. )

PRICE COMPARISION ( NORTH INDIA AUCTIONS )

405060708090

100110120130140150

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Avg

. ( R

s/K

g ) 2010

2009

2008

2007

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All India Exports( A Comparison – Jan to June’10 )

Export outlook

2010 / 20092010 2009 2008 2007 Variance

Jan 17.0 12.0 16.9 13.7 5.0Feb 12.2 12.1 16.1 11.1 0.1Mar 18.0 14.2 17.9 19.2 3.8Apr 12.7 11.3 11.9 9.0 1.4May 11.2 9.8 13.0 9.3 1.4June 12.8 15.0 14.8 13.6 -2.2July 19.4 18.5 10.3Aug 18.7 21.4 17.1Sept 18.4 19.5 15.3Oct 18.7 21.0 13.5Nov 19.2 15.6 12.7Dec 22.2 20.5 11.9Total 83.9 191.0 207.1 156.7 9.6

INDIAN EXPORTS ( A Comparision )

5

10

15

20

25

Jan Feb Mar Apr May June July Aug Sept Oct Nov DecMonth

Qn

ty.

(Mil

.Kg

s)

2010

2009

2008

2007

16

Region wise exports from India

Export outlook

Jan to June Jan to June Variance VarianceRegion 2010 2009 + / (-) %North India 36 38.4 -2.4 -6.25South India 47.9 36.2 11.7 32.32All India 83.90 74.60 9.30 12.47

0 10 20 30 40 50 60

2010

2009

Ye

ar

Qnty. (Mil. Kgs)

South India

North India

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Market review 2010

• Like the Previous 3 months August crop in North India is expected to be down. Pest attack has been contained but not eradicated

• Industry likely to see another year of buoyant prices.

• Domestic demand expected to surge ahead.• Exports have been good on higher Orthodox

production.

Market review 2010

• Excepting North India all others regions are showing substantial increases globally

• If prices are at the current levels then a price hike is expected in the fourth quarter.

• Global production is expected to be more by 135 m kg

• Sri Lanka and Kenya are showing much higher crops but global demand is strong and prices are moving up

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