The price of tea has been on the rise since the last year due to inadequate demand. A sharp decline in African output has triggered buying, which has further hiked prices. Aditya Khaitan, Managing Director, McLeod Russel tells CNBC-TV 18 that he expects the price of quality tea to go up by approximately 10-12%, and other types of tea by 5-7%. The company is expecting current year output to be 104 million kilograms, against 96 million kilograms last year. With the increase in tea prices, the trend for the company this year is looking positive. Below is a verbatim transcript of his interview with CNBC-TV 18's Latha Venkatesh and Sonia Shenoy. Also watch the accompanying video. Q: The first question really is on tea prices. There have been fresh reports that there are fresh Egyptian buyers in the market who have entered the fray and who are pushing up global tea prices. Are you noticing an upward trajectory in tea prices globally? What is the numbers that you can give us? A: I think two things have happened in the season which triggered off this year. We started off with the African market showing a big decline in the first quarter of this year from January to March and even up to April, they have ended up losing around 35 million kilograms compared to last year, and this has obviously triggered off a big buying from the other states around Egypt and UK and other places that do buy African teas. What we are noticing is that week-to-week compared to last year and this year, the difference is around 50 to 60 cents on the higher side this year. So obviously the shortage in Africa is culminating into higher prices going forward into the season. This period also from May to July-August is a dry period for Africa. So obviously the growth of tea coming into the system is restricted and with the shortage of the first quarter obviously people are looking at an overall shortage of around USD 50-55 million for Africa this year. So obviously buying is coming in much earlier and prices are moving up. In India, we started off this season with a USD 100 million deficit in the pipeline and this has also reflected in the prices. In the first quarter from April to June, I think we are around Rs 15 to 20 higher than last year. What is also very pleasing to see is that last year we have lost a lot of crop during the month of April, May and June due to incessant weather and pest activities which this year hasn
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