Tea prices soar on winter demand

KOCHI: Orthodox tea prices have spurted in the Kochi auctions following the onset of a severe winter and partly due to a strike in the Sri Lankan plantations. The high grown and medium orthodox tea variety moved up by an average of Rs 5-10 per kg in the recently-held auctions here. Due to the winter season the demand is generally looking up. Both CTC and dust teas showed a firm to upward trend.

But orthodox teas had the most demand. In the absence of new buyers, Russia continued to dominate, according to the trade sources. As much as 70% of orthodox tea is now going to Russia. The prices of some of the high grown orthodox variety, particularly from the Nilgiris, went above Rs 100 per kg.

The prices of high grown orthodox tea have been hovering around Rs 90 per kg while the medium variety is moving in the range of Rs 75-85. According to Krishnakumar J Shah, one major exporter, the offtake from Russia could be down till January 10 as the market will be closed for Christmas and New Year.

Another reason for the jump in prices, particularly in the orthodox cleaner blacker variety, is said to be the two-week strike in Sri Lankan tea plantations, which has resulted in shortage in the international scene. But some exporters are not buying this theory as the orthodox variety produced by India and Sri Lanka is different. Russia is also a good buyer of Sri Lankan teas.

However, there are reports that the strike has been withdrawn following settlement of labour issues. In that case, Sri Lanka is expected to be active in the export scene after the holiday season. South Indian tea exports have been enjoying a good season so far, with ten month figures ended October 31 showing an increase of over 13 million kg over the same period in the previous year.

Offtake is up from Iraq, Egypt and Pakistan, apart from Russia. However, north Indian tea exports are down by around 13 million kg for the period, keeping total exports stagnant.