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Tea market has opened 2019 on an encouraging note with the auctions of Coonoor Tea Trade Association (CTTA) posting an impressive increase of 39.06 per cent in earnings in January over January 2018.
Tea Board’s order to ban the production in North Indian factories during winter is said to have helped this gain.
In the past, North India would close their factories during harsh winter months when harvest would be uneconomically low in the fields. To that extent, the teas from there would hit the market only by April.
However, in the last few years, following the increase in small-scale bought leaf factories, the production continued even in winter. Corporate sector complained that the tea so produced was low in quality which pulled down the prices for other teas in the country. Responding to this, the Tea Board, for the first time in its history, promulgated orders for closing the factories on specified dates in different parts of North from December 10. Consequently, this winter, there was no flooding of the North Indian markets with sub-standard teas.
Arising from this, upcountry buyers as also exporters stepped up their purchase in South Indian auctions for maintaining their business. This helped the prices rise significantly in CTTA auctions. In three of the four auctions held in January, average prices crossed ₹ 100/kg mark and ruled at the highest level in two months.
Collectively, the average price rose to ₹99.92 a kg from ₹88.79 in January 2018. Despite this, due to increased demand as explained above, the volume sold rose to 56.03 lakh kg from 45.18 lakh kg.
In other words, 10.85 lakh kg more tea was bought despite the average price rising by ₹11.13 a kg.
Consequently, the overall earnings increased to ₹55.79 crore from ₹40.12 crore. This meant that in just one month or the opening month of 2019, CTTA earned ₹15.67 crore more than in the year before. This marked an impressive gain of 39.06 per cent in just a month.
If this trend were to continue in the months ahead, the overall earnings in 2019 would be as much as ₹180 crore more than in 2018, traders contend.
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