Agri Business

Russia-Ukraine war: Tea exporters worried as substantial volume unsold in auctions

P. S. Sundar | | Updated on: Mar 02, 2022
Russia is India’s largest importer of tea.

Russia is India’s largest importer of tea. | Photo Credit: DANIELRAO

About 32 per cent of the offer had remained unsold in the last few auctions

A volume of 15.44 lakh kg has been catalogued for Sale No: 9 of the auctions of Coonoor Tea Trade Association (CTTA) to be held on Thursday and Friday.

It is among the lowest volume of the past one year although it is some 20,000 kg more than offer for last week.

This includes a substantial volume of teas unsold in previous auctions. About 32 per cent of the offer had remained unsold in the last few auctions.

The arrival of fresh teas has not picked up yet as production in January was less than normal level due to adverse winter.

And, the auction is being held amidst worries catching up with the exporters in the backdrop of Russia waging war on Ukraine.

“Business in the entire Europe is volatile now. As of now, orders have practically dried up from Russia, Ukraine and rest of CIS besides Europe. Moreover, exporters are not prepared to ship teas to the uncertain destinations”, an exporter L Vairavan said.

Tea trade

Russia is India’s largest importer of tea. In 2021, it bought 34.09 million kg (mkg) from India, according to the latest data from Tea Board. This meant that 17.44 per cent of India’s total tea shipment went to Russia.

Russia paid ₹612 crore in foreign currency to import Indian tea which accounted for 11.66 per cent of the India’s total export earnings from tea.

In 2020, Russia had imported a higher volume of 37.55 mkg worth ₹646.22 crore from India.

“If exporters to these destinations refrain from actively participating, volume of unsold tea can reduce only if upcountry buyers step up their intake,” Vairavan noted.

Of the 15.44 lakh kg offered for this week’s auctions, as much as 14.29 lakh kg belongs to CTC variety and only 1.15 lakh kg orthodox variety.

The proportion of orthodox teas’ continues to be low in both leaf and dust grades.

In the leaf tea counter, only 79,000 kg belongs to orthodox while 10.28 lakh kg, CTC. Among the dust tea, only 36,000 kg belongs to orthodox while 4.01 lakh kg, CTC. In all, 11.07 lakh kg belongs to Leaf grades and 4.37 lakh kg, Dust grades.

New price record

Homedale Tea Factory continued to create new price record last week.

“Our Red Dust grade, auctioned by Global Tea Auctioneers Pvt Ltd., (GTAPL), topped the entire auctions when Tea Services India Pvt Ltd., bought it for ₹400 a kg. This is the highest price fetched by any tea in the regular auctions of CTTA so far this year, just as last week. It is also the highest price fetched any of our teas since manufacturing started in our factory in 1949,” Homedale Managing Partner Raman Menon said.

Homedale’s Super Red Dust grade, auctioned by GTAPL, fetched ₹370 a kg. In the CTC Leaf tea auctions, Homedale’s two grades, auctioned by GTAPL, topped at ₹398 and ₹311. These were the only teas, CTC or orthodox, from any factory, bought leaf or corporate, which fetched over ₹ 300/kg.

Among other CTC teas, Crosshill Estate Special and Darmona Estate got ₹281 each and Vigneshwar Estate 241.

Quotations with the brokers indicated ₹76-82 a kg for plain Leaf grades and ₹148-219 for the best grades. For plain Dust grades, they ranged ₹78-85 and for the best grades, ₹155-212.

Published on March 02, 2022
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