The Hindu Business Line : Cash crunch weakens Coonoor tea prices

WITH the auctioneers reluctant to yield to low bids, as much as 60 per cent of the 12.46 lakh kg of teas offered for sale at the auctions conducted by the Coonoor Tea Trade Association (CTTA) were withdrawn. Among the teas sold for low bids, the prices on an average dropped by Rs 6 a kg.

``The lorry strike had led to an accumulation of stocks in the warehouses here. So, the buyers faced a cash crunch, as they could not recover payments from their customers. So, the biddings at the auctions were weak," an auctioneer explained to Business Line.

"We have orders on hand, but we are yet to effect delivery for the previous orders. Lakhs of rupees are to be collected for the teas we had already bought on behalf of our upcountry dealers. Only when these teas are delivered and the money comes into our hand, we will be able to be active at the auctions,'' said a leading buyer.

Corporate bodies also chose to be silent in the context of tight cash flow. Duncans and Tata Tea did not operate at all. Hindustan Lever Ltd (HLL) and GPI were not forceful.

The only redeeming feature was the presence of the representative of the Indcoserve in the auction hall.

Ever since the launching of the Teaserve electronic auctions in Coonoor on September 24, 2003, Indcoserve was operating only at that auction centre. The organisation bought some selective dust grades to fulfil its needs for the Ooty Tea project.

Since the auctioneers refused to lower the bid for the exporters, many exporters complained of being out-priced. Russia and other CIS buyers could not pick up the teas for their bids. There was no purchase for Iraq as well. But, Pakistani buyers picked up select grades for a high price of Rs 52 a kg. The exporters to Poland bought Pekoe grades for Rs 43 a kg. There was some revival in the purchase of dust grades for Kenyan market and the prices averaged Rs 48.

"Following a reduction in the bids, the best high grown orthodox brokens and fannings were easier by Rs 2 a kg. The best liquoring CTC brokens lost Rs 3. Plainer CTCs were down by Rs 4. Likewise, better liquoring CTC dusts were easier by Rs 4. Clean black dusts lost Rs 3. The plainer CTC dusts were down by Rs 2,'' said the market report of the joint brokers.

As for the high priced teas amidst the bought leaf factories, Darmona Estate topped at Rs 85 a kg, followed by Vigneshwar Estate at Rs 70 and Hittakkal Estate, Rs 68.

For the next auctions, a volume of 13.24 lakh kg comprising 9.25 lakh kg of leaf and 3.99 lakh kg of leaf has been catalogued.