Agri Business

Tea prices firm up by more than ₹100 a kg in Kolkata auction centres

Shobha Roy Kolkata | Updated on August 19, 2020

Nearly 65 per cent of the first flush crop was lost as the plucking activities had come to a standstill between March 25 and April 13 on account of the countrywide lockdown due to the Covid-19 pandemic   -  Bloomberg

Arrivals have been lower at auctions year primarily on the back of lower production due to Covid

Tea prices at North Indian auction centres including those in Kolkata and Guwahati have firmed up by more than ₹100 a kg on a year-on-year basis. The average price of CTC (crush, tear, curl) and dust at the auction centre in Kolkata was up by almost ₹129.99 a kg to ₹313.58 a kg, as per data available on the website of Tea Board of India.

According to J Kalyansundaram, Secretary, Calcutta Tea Traders’ Association (CTTA), the arrivals were lower at the auctions this year primarily on the back of lower production. The average price of CTC at Sale 33 concluded last week was ruling at around ₹310 a kg, compared with ₹174.25 a kg in the same period last year. Close to 28 lakh kg of tea was on offer at the sale this year compared with 32 lakh kg last year.

Tea production in north India is down by nearly 28 per cent till July this year. Production is estimated to be lower by nearly 148-150 million kg (mkg) till July. The tea estates in north India produced close to 528 mkg of tea till July last year, while this year, it is estimated that the production would be anywhere close to 380 mkg.

Lost crop

Nearly 65 per cent of the first flush crop was lost as the plucking activities had come to a standstill between March 25 and April 13 on account of the countrywide lockdown due to the Covid-19 pandemic. As a result of the lockdown, estates had to go for skiffing (light pruning of tea bush to limit the top growth) in April. That, coupled with unfavourable weather conditions, led to a slower growth of the bush, impacting production of the second flush in subsequent months.

“The production in the first fortnight of August is estimated to be down by nearly 25 per cent. The situation might improve moving forward, but it is difficult to make up for the production loss incurred so far,” Vivek Goenka, Chairman, Indian Tea Association, told BusinessLine.

Impact on export

Exports are also likely to be affected due to the lower supplies of tea in the system. The country exported close to 248.29 mkg of tea in 2019. Exports are expected to be lower by nearly 25-30 mkg at around 218.29 mkg this year. The lower exports might also have a dampening effect on prices, he said.

However, Priyanuz Dutta, Secretary, Guwahati Tea Auction Centre (GTAC), feels “the prices will depend on the demand, and the demand has been pretty steady so far.”

“At GTAC, the arrivals have been pretty decent and steady this year, if not higher than last year,” he said.

Published on August 19, 2020

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