Tea stocks Get Tastier After Production Shortage

Tea Stocks - Small-cap tea stocks flared up on the Street on Tuesday in anticipation that prices of tea will increase due to a shortage in production. Dhunseri Tea sprang 9.6% to a new high. HarrisonsBSE 7.31 % Malayalam rose 12.8% rising to a three-month high. Jayshree Tea gained over 6% to an eight month high level. Goodricke group rose 2.6% breaking its losing streak of the last six days. Warren Tea closed 3.6% higher. Rossell India rose 4.7%. Stock of Mcleod Russell, the largest tea producer, rose 3.45%.

Production in Assam has been affected this year year due to heavy rains followed by a pest attack. In West Bengal, a dry spell has affected the crop in Dooars and Terai."Prices of quality tea has already appreciated by Rs 4-5 per kg. And prices will remain strong in coming months as the season has come to an end. We feel that the new season will open on a strong note and prices shall be up by Rs 15 -20 per kg if the weather is conducive and production is good.

Packet tea manufacturers are also buying heavily in the auctions to create the stock for the winter season up to March till the new crop arrives. Tata Global Beverages and HULBSE -0.61 % are buying good quantities at the Kolkata and Guwahati auctions. Even the regional packet tea manufacturers are also active at the auctions.

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