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Rising tea prices in North India coupled with the continuing uncertainty in Sri Lanka has prompted overseas buyers, especially from Iran, to source more quantities from Kochi auctions.
Traders pointed out that orthodox tea prices in Kolkata auctions are hovering in the range of ₹350-450 with the second flush, prompting overseas buyers not only from Iran but also from places such as Turkey and Russia to look at South Indian markets.
Auctioneers Forbes, Ewart & Figgis said clean black, well-made Nilgiri whole leaves witnessed a good demand and increased in value and the average price realisation in sale 25 was up by ₹4 at ₹159 per kg.
The quantity offered in orthodox grades is also on the rise in the recent period in which the trade attributed the reason to the shifting of producers with dual manufacturing facilities to orthodox tea production. This is evident from the declining trend in CTC dust future offerings at Cochin from the existing 9,44,752 kg, traders said.
Meanwhile, CTC dust prices were up by ₹3 to ₹5. The average price realization rose to ₹127, witnessing a ₹6 increase from the previous week.
A leading tea exporter in South India told BusinessLine that Iran and other West Asian markets are traditional buyers of orthodox leaf from both South Indian and North Indian auction centres. However, surging prices of orthodox and best quality CTC teas has prompted them to look at South Indian orthodox teas as well.
Sri Lanka factor
The uncertainty in Sri Lankan tea market is also a factor in the demand increasing. But the availability of orthodox grades is very low at all these centres. The rising demand is likely to continue for some more time. However, to cater to the growing demand, he said three big tea manufacturing companies in South India are reported to have taken the lead to raise orthodox tea production.
He said CTC dust prices in Coonoor auctions have witnessed a subdued demand leading to a significant drop in prices with 75 per cent of the offered quantity remaining unsold. This is mainly because of the reserve price fixed by bought tea leaf tea manufacturers.
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