The transition is from a mere commodity to a branded consumer product. Tracking the chronological patterns, there appears to be a distinct demarcation of boundaries in the spatial context between tea treated as a commodity and the commodity used as a raw material. The relative importance of each is debatable.

Production, perhaps the most important facet of flourishing as a commodity happens to be primarily a phenomenon of the developing world. The Asian producers, India, China, Sri Lanka and Vietnam account for three-fourths of the world production. And shifts from a mere commodity to a product per se is clearly a trend in the developed economies. However, this does not necessarily mean that these two different type of economies have water-tight operations as far as the treatment of tea as a commodity and a brand is concerned.

Almost 31 per cent of the world production of tea is from India. The increase has been steady all through with a record production of 870 million kg in 1998. Trends, however, indicate that India in the current year will face a beating in the production figures primarily on account of depressed weather conditions. Not only for India, other leading producers including China, Kenya, Sri Lanka will also register low figures.

Being a large producer has given India a distinct advantage. There has never been or will be a dearth in the commodity ever. The share however, may witness a decline with other countries increasing their share in production. Iran,Vietnam, Indonesia and Bangladesh are countries whose interests in the tea crop as grown.

As analysts put it: a large production with higher productivity is an ideal combination for a thriving commodity. India by virtue of being the largest producer has not necessarily been the country with the highest productivity levels. Kenya has the distinct advantage of clocking higher productivity levels even though being a new entrant into tea production. Sri Lanka which was lower on productivity yields has improved only in recent times.

Exports
India’s share in the export market has seen a decline over the years. The low level of exports compared to countries like Sri Lanka and Kenya is justified by the industry which says that these countries are among the larger producers and depend solely on exports on account of a very low domestic market.

Given the current trends, the industry has projected a much lesser export figure at 170 mkg for the current calender year. This figure is expected to be considerably lower than last years when exports touched 206 mkg. Of the total projection, 70mkg would be to Russia and the CIS countries (93mkg) and 100mkg would be exported to rest of the world (113mkg). Tea exports were down by 17 mkg up to June this year.

Lower projections stem from the lack in Russian buying this year. Exports to Russia and the CIS is expected to drop by almost 13 mkg this year. Russia, which is believed to have imported up to 35 mkg till July this year from India is likely to increase its buying in the last few months of the year, and end at 70 mkg in 1999.

Russian imports from India are running at about 20 per cent below the previous year which is, to some extent, offsetting the lower crop in India. While the overall crop this year is markedly down, the shortfall is not reflected in the prices showing that a lower demand through out has become an important factor.

The balance of supply and demand is very fine at present feel many experts, and it will not take much on either sides to swing the market one way or the other. Some industry captains contend that the over-dependence on the Russian market has been responsible for the current crisis. For companies which export to Russia however, have a different point. One should try to understand that the Russian market was a very lucrative one where volumes were concerned. A switch from the hard currency areas, however, have had their repercussions in the form of Indian tea losing a market in UK.

This again was a policy decision by the Indian Government to square off loans under the debt repayment scheme. Lower exports are expected from countries like ARE, Poland, Saudi Arabia and UAE this year. Export gains are expected from Iraq and Libya which have made enquiries from South India. The UK market, however, is expected to register increases.