The Hindu Business Line : Coonoor tea prices drop on low demand

PRICES fell by Rs 3 a kg at the second auctions for 2006 conducted by the Coonoor Tea Trade Association (CTTA) as the demand was inadequate to absorb the nearly 3 lakh kgs of increase in volume over the previous week.

Nearly 30 per cent of the offer of 10.42 lakh kgs went unsold. Most teas withdrawn belonged to the plain and medium grades, which the buyers rejected as poor quality.

"Prices rose in the last few weeks because of low offers and improvement in quality. Now, the volume of low quality teas is increasing which the producers should carefully note" an auctioneer told Business Line.

But, the absence of mentionable export demand also led to low prices. Barring some low-volume purchases of the bolder grades for the Russian markets, there was hardly any activity on the export front.

Conspicuously, the buyers for Iraq and Pakistan markets who were active in 2005 were silent this week.

"Orthodox whole leaf grades suffered a lot. Their prices dropped up to Rs 7 a kg and there were withdrawals as the sellers refused to lower their high-priced portfolios. Some good liquoring CTC dust grades were difficult to be sold.

Medium dusts shed Rs 2 and some portions had to be withdrawn for want of bids.

Plainer dusts could be sold only when the prices were dropped by Rs 4 a kg. Even then, some teas did not get acceptable bids and were withdrawn.

Fibrous varieties were withdrawn," an auctioneer explained.

On the positive side, there was a strong demand for the CTC leaf brighter liquoring teas, which advanced by Rs 3 a kg.

Also, clean liquoring leafy orthodox Secondaries dusts and powdery residuals were dearer by Rs 4 a kg.

Among the CTC teas bought from leaf factories, Darmona Estate got the highest price of Rs 90 a kg. Homedale estate came second at Rs 81.11. Vigneshwara estate got Rs 73, while Highfield Estate got Rs 71.

Quotations held by the brokers indicated bids ranging from Rs 33 to 35 a kg for the plain dust grades and Rs 61 to 68 for the brighter liquoring grades. For the plain leaf grades, bids ranged from Rs 35 to 37, while those for the brighter liquoring grades, they ranged Rs 58 to 70.