Tea stocks turn hot
Tea stocks that gained were, Mcleod Russel (up 5.10% at Rs 88.50), Tezpore Tea Company (up 5% at Rs 56.35), Assam Company (up 3.93% at Rs 25.15), Harrisons Malayalam (up 2.44% at Rs 77.60), Warren Tea (up 2.95% at Rs 75), and Tata Tea (up 0.61% at Rs 894.
According to Food and Agricultural Organisation (FAO), global tea prices are expected to maintain their upward trend this year due to tighter supply, particularly due to lower production in Kenya. Foreign investment bank Merrill Lynch said in a client note it expects tea prices to 24% over FY 2008-10 following a production slump in Kenya in January-March 2008 and low pipeline stocks in India
According to reports, Kenya is currently seen as the primary force behind better prices. Kenya is facing two problems. One, on the political front, where the unrest in that country has affected tea estates and violence in some parts has even led to burning of the gardens. The second factor is drought in the growing areas which has already affected production. The FAO estimates that production in the African country could be lower by as much as 10%.