Kochi, Feb 10 Tea shipments from the Kochi auctions to earthquake affected Syria andTurkey are likely to be hit in the coming weeks. Buyers from these countries procured brew from Kochi after disruptions in the Sri Lankan market due to political unrest in that country.
Traders said cargo trans-shipment was mainly carried out through the West Asian markets. The weekly procurement was reported to be around 1.5 lakh kg.
Traders said the worsening war situation in Ukraine has forced exporters to focus on regular buyers in Russia, rather than new customers, to avoid credit payments. They are looking forward to the rupee-rouble payment mechanism to materialise, as it will benefit tea shipments to the Russian markets.
India imported 25.97 million kg of tea in 2021-22Coffee exports increases 38% to $1.016 billion during the fiscal
Slew of bearish factors
Meanwhile, the orthodox leaf market was down, with the average price dropping to Rs 7/kg, thanks to subdued overseas demand. Only 64 per cent of the 2,91,853 kg offered in sale 6 was sold. Exporters to the CIS and West Asia were selective.
Dipak Shah, Chairman, South India Tea Exporters’ Association, said the slowdown, recession and pesticide issues have led to a downward slide in orthodox leaf prices.
On the impact of the withdrawal of bulk quantities of tea from the Kenyan auctions, he said the producers had withdrawn 30-40 per cent from the auctions due to lower prices. However, they would have to liquidate their stock at some point of time as they cannot hold tea beyond five months.
Declining overseas demand hits orthodox tea shipments from Kochi auctionsQuality issues and overpricing seen as reasons for subdued export demand
Kenyan tea producers are controlled by the government, which maintains a minimum price in the auction. When they are unable to get a good price, there is a huge withdrawal and accumulation of teas. Pakistan and Egypt are the major buyers of Kenyan teas and the current crisis in the two countries is stated to be the reason for the drop in prices.
At the same time, he added that Kenya is selling good teas at higher prices to select overseas markets, fetching a price of $3-plus /kg.