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Backed by robust demand from international markets, orthodox tea prices have firmed up by nearly 18 per cent.
The average selling price of orthodox tea was around ₹255.06 a kg at the recently concluded Sale 16 in Kolkata as compared to ₹216.06 in the same period last year. CTC prices were also up nearly three per cent at ₹149.25 a kg at Sale 16 (₹145.03).
Firm demand
“While the quantity of tea sold at auctions remains unchanged from last year, prices are ruling higher,” J Kalyan Sundaram, Secretary General, Calcutta Tea Traders Association, told Business- Line.
Firm demand from overseas markets, particularly for the orthodox variety, has been one of the key reasons for the improved prices. Even till about end-March, prices of first flush tea were ruling ₹15-20 a kg lower compared to the same period last year.
However, prices started improving last week. Data available on the Tea Board of India website shows that for the week ending April 13, the average prices of CTC leaf and dust sold at auction centres in Kolkata were ruling almost 28 per cent higher at ₹147.38 a kg (₹114.92), while in Guwahati were 10 per cent higher at ₹169.83 a kg (₹154.56).
“The new season orthodox teas have just started coming into the market. There is a lot of export enquiries which shows the demand for Indian orthodox teas. This is reflecting in prices,” said Sujit Patra, Secretary, Indian Tea Association.
Kenyan drought
An improvement in orthodox tea prices is likely to reflect in the price of CTCs as well. The extreme drought-like condition in Kenya, which is one of the key producers of CTC teas, is expected to impact production this year, Patra said. This would naturally turn the attention of buyers of CTCs to India, thereby pushing up demand and prices of CTC teas.
According to Vivek Goenka, Chairman, ITA, consumption has been rising and this is likely to spur demand.
Higher prices would certainly come as a respite for producers who have been reeling under the pressure of rising costs outstripping price realisations.
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