Tata Tea managing director SM Kidwai while delivering his speech on India Tea Scenario at the International Tea Convention held here said that the price profile of Indian tea for the past 18 years does not present a rosy picture. "Prices have widely fluctuated and there have been more bursts than booms", he said adding "there was a great deal of euphoria last year when the prices have gone on a spin--in terms of India rupees. But in terms of dollars the average auction price as a whole in 1998 was only $1.85 per kg--just what it fetched 18 years back".

In 1980 the auction average was $1.73 per kg. During the first half of 1999 the prices have declined to an average of about $1.60 per kg, the Tata Tea MDsaid.

In rupee terms the tea industry has earned Rs 4,383 million in 1981 and which went up fivefold to reach Rs 21,562 million by 1998. But in terms of dollars the respective figures were $506 million and $510 million, he said.

"The importers should be happy as they are paying in 1999 for tea less than what they paid in 1980!" he said.

He said besides the worsening terms of trade of agriculture products in general, a major factor that paved the way for the value erosion is the lack value addition by the Indian tea manufacturers. This is the fallout of prohibiting taxes imposed by various quarters on the industry, he said.

Tea has over the years lost the status of one of the premier export earners for the country. From being one of the top export item, tea now accounts for a meagre 1-1.5 per cent of the country's total exports. This is despite a tremendous increase in domestic production--from 354 million kg the total domestic production has increased to 870 million kg in 1998.

Of the totalproduction, 758 million kg was CTC variety, 104 million kg was Orthodox and 8 million kg was green tea. There was a decline in Orthodox production because the export demand was slack.

A major factor for the dip in exports is the ever growing domestic demand for tea. "In 1961 the domestic the domestic consumption was only 140 million kg while the exports were around 200 million kg. Our exports in 1998 are still 206 million kg, leaving 664 million kg for domestic consumption," he said.

Despite a growth in domestic demand the per capita consumption is much lower in India at 660 grams, lower than even Sri Lanka and importing countries like the United Kingdom where it is over two kg per head.

The yield per hectare in the Indian tea gardens has nearly doubled from 1,070 kg per hectare in 1961 to 2,000 kg by 1998. South India's tea estate sector has already reached an average of 3,000 kg per hectare, which is comparable to the international standards.