Tea Prices Decline At Coonoor Auction - Oct 20, 2008

Coonoor: Prices declined by Rs 2 a kg on the average at Sale No 42 of the auctions of Coonoor Tea Trade Association (CTTA) on Oct 17 as the demand was insufficient to absorb the huge offer of 13.07 lakh kg - the highest for 11 weeks except last week. CTC leaf market saw select demand. Better medium grades lost a rupee a kg. Whole leaf orthodox teas relaxed Rs 3-5. Brokens shed Rs 2-3. Brighter liquoring CTC dusts lost a rupee.

Better medium sorts got Rs 2 lower. On the export front, CIS purchased bolder grades for Rs 72-74 a kg. Egypt picked up medium sorts in the range Rs 74-82. Quotations showed bids ranging from Rs 70-74 a kg for plain leaf grades and Rs 90-97 for the brighter liquoring sorts.

Tea Prices Have Increased

Coonoor: Tea prices have increased in all the auction centres across the world except Jakarta in the first quarter of calendar 2008 over the same period last year, an analysis of market reports from various auction centres indicates. Sri Lankan teas continued to fetch the world’s highest price. Between January and March 2008, prices averaged $3.04 a kg at Colombo auctions. This was 80 cents or 35.71 per cent more than January-March 2007. In dollar terms, no other auction centre posted this much increase. In percentage terms, this was the second highest, next to Chittagang.

Kenyan teas fetched the second highest price in global trade. In the first quarter of the current calendar, price at Mombassa auctions averaged $2.19 a kg. This was 53 cents or 31.93 per cent more than last calendar. In dollar terms, this was the second highest increase among all auction centres

India trend

Indian teas fetched the world’s third largest price average of $1.64 a kg — that is, 28 cents or 20.59 per cent more than last calendar. Of them, prices at North Indian auctions rose 34 cents (23.94 per cent) to reach $1.76. Prices at South Indian auctions increased 18 cents (14.63 per cent) to touch $1.41.

Indonesian teas ranked next in price average. At Jakarta auctions, prices averaged $1.43 a kg. This was 8 cents or 5.3 per cent lower than last calendar. This was the only auction centre to have posted a lower price average this calendar. Bangladesh teas fetched the next highest average price.

Active Demand Of Coonoor Tea

Coonoor: Prices rose Rs 2 a kg on the average at Sale No. 17 of the auctions of Coonoor Tea Trade Association (CTTA) here on Friday despite the volume offered being a 23-week high (barring last week’s offer), as active demand prevailed.

Quality invoices fetched handsome price-increase as buyers went scouting for them. “High-priced CTC leaf grades fetched Rs 2-3 a kg more. Smaller brokens and fannings were dearer by Rs 3. Clean black sorts fetched Rs 5 more. Orthodox whole leaf and primary grades were dearer by Rs 4-6. Brokens and fannings got Rs 5 more. Better medium and medium CTC dusts got Rs 2 more, while their plainer counterparts Rs 3-4 more. Primary orthodox dusts got better demand than in the recent weeks. Clean secondaries sod dearer up to Rs 3. But, some teas falling below buyers’ quality expectations suffered withdrawals”, an auctioneer told Business Line.

Among the corporate buyers, Hindustan Unilever Ltd lent useful support for good medium leaf grades. It did not operate in the dust market.

On the export front, Pakistan was forceful on blacker sorts. It also picked up some well-made fannings to cover short supplies. Egypt shippers bought smaller brokens and fannings. CIS and Poland continued to be selective.

Among the CTC teas from bought-leaf factories, no brand crossed the Rs 100-mark this week. Darmona Estate got the highest bid of Rs 99 for its RD grade. Homedale Estate got Rs 92, Selva Ganapathy Supreme Rs 90, Hittakkal Estate Rs 88, Deepika Supreme Rs 86, Green View Estate, Kannavarai Estate, Shanthi Supreme, Professor, Vigneshwar Estate and Highfield Estate Special Rs 84, Ella Estate Rs 83, Sree Ram supreme Rs 82, Garswood Estate and Kotagiri Estate Rs 80.

Among the orthodox teas from corporate sector, Curzon got Rs 123, Chamraj Rs 118, Colacumby Rs 112, Tiger Hill, Prammas and Kairbetta, Rs 105, Kodanaad, Corsley, Glendale, Sutton and Thaishola Rs 100.

Quotations held by the brokers indicated bids ranging from Rs 45-47 a kg for plain leaf grades and Rs 65-84 for the brighter liquoring sorts. They ranged Rs 49-53 a kg for plain dust grades and Rs 65-82 for brighter liquoring sorts.

Tea Prices Rule Steady At Kochi Sales

Kochi: The Kochi tea auction remained subdued with no major vacillation in prices. There was a fair amount of arrivals in the dust tea category, while the quantity on offer at leaf tea auction was not significantly different. CTC dust was fully firm to dearer in the dust tea auction which had 10,54,000 kg on offer.

There was good demand from internal traders while major blenders and exporters operated on high-priced finer grades. Best CTC varieties fetched Rs 64-76, medium CTC was at Rs 58-63 and below medium ranged at Rs 52-55. High grown BOPD fetched Rs 107, medium BOPD quoted Rs 48-50 and secondaries were at Rs 43-47.

Leaf Sale

High grown whole leaf grades sold around last week’s levels at the leaf tea auction which had 2,63,000 kg on offer. Broken varieties remained fully firm. Medium orthodox broken met with good demand and were dearer by Rs 1-2. Clean black CTCs were steady.

Some exporters operated selectively at the leaf tea market. Best Nilgiri varieties fetched Rs 80-90, medium orthodox was at Rs 69-79 and plain orthodox quoted Rs 50-57. Best CTC leaf was at Rs 55-57 and medium CTC quoted Rs 46-53.

Tea Prices Continue To Gain, Up Rs 10-15 A Kg

Kolkata: It is about a couple of weeks since the new season for North Indian tea started, but with an average auction price increase of Rs 10-15 a kg compared with the corresponding period last year. This is more or less in keeping with the trend that persisted in the last quarter of 2007.

Drop in exports

One reason for this is the absence of carryover stock, largely due to high domestic consumption. The domestic consumption in 2007 was so high that even the drop in exports during the year compared to 2006 did not improve the domestic availability to leave with some stocks.

Also, the crop in March this year was lower compared to that in March last year, the shortfall being estimated at 40 per cent. The April crop, of course, is better but together with the March crop, the overall shortfall, it is estimated, will be about 20 per cent.

Industry bullish

The North Indian tea industry is bullish because it feels that there will be no respite from the price increase this year, largely due to the demand-supply mismatch. The domestic consumption has been growing at three to 3.5 per cent annually. Which means, every year the additional domestic demand will be up by around 30 million kg (mkg). But where is the tea to meet this burgeoning demand?

The production cannot be increased substantially within a short period. More important, the domestic availability of tea will not improve due to some other reasons also. With the Kenyan crop having failed and the world tea prices having risen by around 30 per cent, exports appear to be an attractive proposition. There being an accent on larger production of the orthodox variety fetching higher prices in the international market, any increase in orthodox production will entail drop in the CTC production to that extent. In 2007, the orthodox production was up by about 15 mkg.

Export demand

The export demand, it is felt, will also be fuelled by the probable increase in demand for Indian tea – the CTC variety from countries such as Pakistan and Egypt.

With the prospect of payment crisis in Iraq getting resolved soon, there might be additional demand for CTC tea from that country. Iran is likely to emerge as a major buyer of Indian orthodox tea, it is felt.

Tea prices may rule high on short supply

Kochi: The tea prices in India are expected to remain at the current comparatively higher levels impacted by international scenario, where the prices are ruling high on reported crop loss in Kenya during the first quarter of 2008.

Prices of the CTC leaf and orthodox teas are at moderately higher levels in the world market. Kenyan tea was quoted at 237 cents/kg in January 2008 as against 178 cents/kg in January 2007. Similarly, Sri Lankan tea was sold at 305 cents/kg in January 2008 as against 209 cents/kg in 2007. The current prices show the tight supply position in the world market, trading sources told Business Line on Wednesday.

Tea output in Kenya during the first quarter is said to be lower by 35 per cent due to the ethnic conflict and drought conditions there. It is reflected on the world tea prices. “Impacted by the international scene, the prices of Indian CTC leaf and orthodox teas are expected to remain at the current levels,” they claimed. The prices of dust teas are, however, influenced by the domestic market, they said.

“We won’t say that the current prices are not remunerative, but we have to accept that there has been a jump from Rs 47 a kg last year to Rs 55.67 (all teas) in January 2008,” they claimed.

Non-traditional markets

They said non-traditional markets such as Turkey, Syria and Jordan were opening up for south Indian orthodox teas. Orders have started pouring in.

Demand, shipments

According to plantation industry sources, the recent extended summer showers in the southern States have not made any negative impact on the tea and instead it has been good to the crop.

“We can expect a good crop in April/May,” they said.

Sharp fall in demand from the CIS countries, Iraq and Pakistan in 2007 compared to the previous year has significantly pushed down exports from South India, which stood at 72.7 million kgs in 2007 from 119.9 million kgs in 2006. All India exports fell to 156.8 million kgs from 218.7 million kgs.

Shipments to CIS dropped to 43,950 tonnes from 49,110 tonnes in 2006, while that to Iraq fell to a mere 2,490 tonnes from 41,330 tonnes in 2006. Similarly, exports to Pakistan dropped to 5,150 tonnes from 14,730 tonnes in 2006.

However, the shipments of Indian teas to Arab Republic of Egypt (ARE) have shown a tangible increase in 2007 to 4,880 tonnes from 2,750 tonnes in 2006.