Tea producers predict another gloomy year

JAKARTA (JP): Local tea producers have predicted another gloomy outlook this year as overwhelming supply in the world market would continue to depress tea prices.

The Indonesian Tea Association's chairman, Rachmat Badruddin, said on Friday that tea output was currently exceeding its demand and would result in weakening prices.

"Since 1998, world tea output has exceeded demand, mainly due to an increase of 70,000 metric tons from Kenya, the world's fourth-leading tea producer, while the world's carry-over stock is still abundant due to the drop in demand," he said during a breaking of the fast gathering.

"It is predicted that in 1999, world tea production will outstrip demand for the second year running, helped by likely record supplies from major producing countries such as India, China and Kenya."

Rachmat predicted that Indonesia's tea production would reach 160,000 tons this year, the same level as last year's, 128,000 tons, 80 percent, of which would be exported.

Indonesia is currently the world's fifth-biggest tea producer, after India, China, Sri Lanka and Kenya. The country produces around 150,000 tons annually.

Indonesia's main tea producing areas are West Java, East Java and North Sumatra.

Last year, Indonesia exported 101,532 tons of tea worth US$120 million, 97,200 tons of which was black tea and 4,332 tons green tea.

The country exported most of its tea to Pakistan, the United States, the United Kingdom and Russia. The rest was sent to other European countries and the Middle East.

According to the association's data, tea plantations in Indonesia currently cover 160,529 hectares: 61,464 hectares are owned by small plantations, 54,795 hectares by state plantations and 44,270 hectares by private estates.

Rachmat said that local tea producers enjoyed a windfall income from increasing tea prices in the domestic market last year due to a weakening of the rupiah against the U.S. dollar.

Low quality tea is currently traded at between Rp 5,000 and Rp 6,000 per kilogram, he said.

The price is considered good, although it is still lower than last year's price which reached Rp 10,000 per kilogram, he said.

Rachmat said that a windfall in exports could not be enjoyed by local tea producers due to their low productivity and efficiency.

The productivity rate of state tea estates has been an average 2.3 tons a hectare per year since 1992, against the small holders' productivity rate of less than 0.5 tons per hectare. (gis)