Bullish on tea prices for 2011: Duncans

In an interview with CNBC-TV18, Gouri Prasad Goenka, Chairman, Duncans, spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of his interview with CNBCTV18's Reema Tendulkar and Ekta Batra. Also watch the accompanying video.

Q: We understand that on account of the drought in Kenya, there will be a shortage in terms of the global supply and that will aid tea prices. Could you tell us what is the expected industry shortfall and how much of a price increase can we see in India?

A: Frankly with or without a drought in Kenya, there is going to be a world shortage of tea. I am reasonably bullish on tea prices and the Kenyan drought is an icing. But weather conditions may be bad one month and they get back to square one in the following month. So that is really a very temporary phenomenon.

Q: As of now what is your expected production shortfall for India maybe and how much can the prices go up from here, where do they currently stand?

A: I think prices of good tea will continue to be reasonably bullish in the year 2011. If the shortfall is close to about 50-60 million kilos, the world supply, there is no way in which we can stop tea prices from going up.

Q: In Q3, your revenue from tea was around Rs 50.6 crore, what is your expectation going forward in terms of revenue potential, once this situation in Kenya possibly fructifies?

A: Tea being an agricultural product and since the crop varies from month to month and particularly in North India almost 75-80% of production is during the July-October period, so it