Production, Consumption and Export of Indian Tea, 1985-2003: A Time-Series Analysis

This paper analyzes the lag effects of tea exports and consumption on production during the period between 1985 and 2003 by applying Almon polynomial lag model. India's tea exports fail to keep pace with the increase in tea production, particularly in the recent decades. The Indian tea industry has been experiencing spans of upward and downward movements in price realization of manufactured tea due to mismatch between demand and supply, resulting in distortions in production of green tea leaves as well as manufactured tea. As India is a member of the WTO, the import of tea into India ironically cannot be restrained even when comparatively lower prices prevail in the domestic tea market and export realization of tea prices do not commiserate with the cost of tea production.