The Hindu Business Line : Price realisation of tea up on demand

Chennai, June 9 Re-emergence of demand for tea from merchant exporters and fall in production have led to a Rs 10 a kg increase in price realisation during May this year compared with last year. For the annual period, tea prices have increased by an average Rs 6.33.

Tea exports are showing an improved trend, albeit marginally with shipments increasing by 3.4 million kg (mkg) during January-May this year compared with last year to 66 mkg.

During May, exports increased by 1.6 mkg to 10.8 mkg.

Production during May declined by 4.1 mkg to 70.3 mkg but the overall output for the year to May is up 13.8 mkg at 240.2 mkg.

Kenyan Crop loss

According to industry sources, merchant exporters were buying in view of good demand following crop loss in Kenya.

“The purchase by merchant exporters may not be reflected in the export figures but we will witness that soon,” they said.

According to Carritt Moran, the quantity of tea sold at Mombasa declined 12.2 mkg during May to 23.4 mkg and for the January-May period, the volume has declined 37 mkg to 122.3 mkg.

However, Sri Lanka has gained mainly from the fall with the quantity sold at its auction rising 22.5 mkg to 118.2 mkg.

Exports from Lanka gained 5.4 mkg in April and for the January-April period, they have increased by 8.5 mkg.

Price realisation

In terms of realisation, Kenyan and Sri Lankan tea have gained Rs 26.52 and Rs 29.98 a kg respectively.

In the domestic auctions, the increase in quantity has been 7.3 mkg for the January-May period and 4.3 mkg during May.

“We have now found a good market in Egypt following our marketing efforts. Demand is re-emerging from Iraq and there are positive signs with the Centre also taking action against our exporters who have defaulted on quality and quantity. The trend in exports to Iraq is better than last year,” said Mr Ullas Menon, Secretary-General of the United Planters Association of Southern India.

Pak buying

Pakistan’s buying has also increased but it is looking for cheaper tea.

“There is no tea available at the price at which Pakistan is looking for,” said Mr Menon.

“We are also helped by domestic demand.

“The domestic intake is increasing,” he said.

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