Although prices have been posting an increase of Rs 2-3 a kg week after week since the auctions of Coonoor Tea Trade Association opened for 2011, prices are still ruling below last year's levels, reveals an analysis of Market Reports.

Prices have been responding to increased demand arising from low supplies.

Due to winter, production has fallen and the volume offered has declined to the lowest levels of the last couple of years. The volume in North Indian auctions also will pick up only by April. Due to harsh winter, consumption has increased in Europe and the US. Collectively, the demand pressure at Coonoor auctions has increased resulting in concomitant rise in prices in the last three weeks.

High-grown winter quality teas have been fetching significant increases in prices.

Still, the average price now fetched is lower than the levels this time last year. Currently, the average price is Rs 71.60 a kg – almost Rs 2 lower than last year.

The decline is visible for both the orthodox and CTC teas. The prices of orthodox teas, which are mostly exported, now average Rs 78.57 a kg against Rs 85.02 this time last year. The prices of CTC teas, which are mostly consumed within the country, now average Rs 70.96 against Rs 73.16 last year.

This week, quotations held by brokers indicated bids ranging Rs 50-53 a kg for plain leaf grades and Rs 80-138 for brighter liquoring sorts. They ranged Rs 61-66 for plain dusts and Rs 90-140 for brighter liquoring dusts.

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