The Hindu Business Line : Tea exports slacken as buyers cancel orders

Chennai, Dec. 9 Cancellation of orders and requests for renegotiations have led to a slowdown in tea exports during the last couple of months. Exports dropped nearly two million kg (mkg) in September compared with the same period a year ago and slipped almost one mkg in October, to 16.55 mkg from 17.45 mkg.

However, thanks to demand from emerging markets such as Egypt, Iran and Pakistan, overall exports increased 15 mkg to 156.46 mkg during January-October this year compared with the year-ago period.

“Many orders were cancelled post-Diwali or buyers postponed taking delivery till December-January. Some exporters even reduced the quantity of purchases. In some case, consignments were renegotiated and bought,” trading sources said.

“Exports also slowed down due to the general slackening trend. Sharp fall in prices also contributed to the downtrend,” plantation sources said.

Kenyan shortage helps

“Prices have crashed nearly 30 per cent since September. Only during the end of the week, prices tended to look up at Mombasa auctions in Kenya,” trading sources said. Previously, the rates had crashed for three consecutive weeks as Kenyan production looked to rebound.

A shortage of over 30 mkg in Kenyan production has helped India gain in the export market. Pakistan, Egypt, Iran and Iraq and West Asian countries looked to India for their requirements.

Besides these, Kenya itself bought from India to meet its export obligations.

Production up

Meanwhile, production in October increased to 125.8 mkg against 113.3 mkg during the same period a year ago. For the January-October 2008 period, production has been estimated at 832.6 mkg against last year’s 802.6 mkg.

During October this year, South Indian tea output zoomed to 23.6 mkg (17.8 mkg), while North Indian production rose to 102.2 mkg (95.5 mkg).

The period from January to October 2008 saw South Indian production rise to 200.8 mkg (178.9 mkg) while North Indian output stood at 631.8 mkg (623.7 mkg).

Tea production this year has been pegged at 960-970 mkg compared with 955 mkg produced last year.

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