The cancellation of some export contracts has impacted the orthodox tea market in Kochi auctions this week, leading to a price drop of ₹7-10 per kg.

An exporter familiar with the development cited quality issues raised by the overseas buyer for his export consignment that led to the stoppage of his entire procurement. This buyer has made orders for the purchase of good quantities from other exporters as well, reportedly around one million kg. 

The emerging situation has prompted other overseas buyers to stop purchase. The trade, according to the exporter, is waiting for the report from the country that rejected the consignment.

Exports hit

The present issues have totally hit all export orders of tea from the auctions. The exporter maintained that it was a normal practice among overseas buyers to go in for purchase in booming time and abstain from the market during any uncertainties in the trade. It is reported that the order from the overseas buyer was a government tender and the client is planning for re-tender once the issue is resolved.

The auctioneers Forbes, Ewart & Figgis said the sales percentage in sale 12 was only 86 per cent out of the offered quantities of 1,93,455 kg, and brokens in orthodox grades was lower with longer margins of ₹5 to ₹10. Exporters to CIS countries, West Asia was selective and subdued.

CTC leaf market was also down with only 88 per cent sold of the offered quantities of 32,000 kg.

In dust sales, subdued local demand and selective purchase of blenders have hit prices with CTC grades down by ₹2 to ₹3. However, the popular marks of Kerala appreciated in value in the absence of sale 14 due to the Easter holidays.

The quantity offered was 7,67,527 kg and the sales percentage was only 83 per cent.