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Intermittent rains in the high ranges for the last several days have hit tea arrivals at Kochi auctions, especially CTC dust grades.
The offered quantity in sale 42 in CTC dust was 8,60,871 kg and the market was lower by ₹1-2 and witnessed withdrawals. Blenders demand was subdued, while there was some improved enquiry from exporters and upcountry buyers, said the auctioneers Forbes, Ewart & Figgis.
However, there are also reports that large arrivals of orthodox leaves in the auctions were because of the conversion happening in the tea factories from dust to orthodox grades so as to cater to the rising export market.
Trade sources pointed out that the overall market is witnessing a subdued demand for quite some time due to various factors which led to lower procurement for local consumption. There was a time when local consumption was more in quantities for a longer period. But now the procurement was only hands-to-mouth, maybe because of a cash crunch.
Quality impact
The rains have also affected the quality of teas in all the grades, but good teas are selling more. In orthodox leaf, the payment problem with overseas buyers especially from Iran is continuing, prompting exporters to desist from making any further shipments.
However, an official in a tea-producing firm warned of the emergence of Kenyan Tea back on the overseas market which is expected to provide a stiff competition to Indian tea when it replaced Sri Lankan brew due to declining production in the island nation.
Kenyan tea is back with vigour now in the overseas market after being hit by a production drop because of drought. They have an advantage of lower production costs compared to India.
The average price realisation in orthodox leaves was down by ₹4 at ₹160. The quantity offered was 4,27,486 kg and the sold quantity was 82 per cent. Exporters to CIS and West Asia were active. High-priced medium whole leaf was lower.
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