Tea prices decline by ₹12-18 a kg in North India auction centres

Despite the decline in production of the first flush crop, tea prices in auction centers in North India have been falling year on year, leaving the industry and commerce somewhat at a loss.

While the average CTC prices across various auction centers in North India have fallen by around 12 to 18 kg on a yearly basis, the decline is significant in the case of orthodox which has fallen by almost $100 per kg almost Rs 220-230 per kg, sources said. year compared to the same period last year.

The weekly average prices for CTC papers and dust at the Kolkata Auction Center for the week ending July 1 were judged at around ₹242 per kg, down nearly 15kg from ₹257kg in the same period last year. While prices at the Guwahati auction center were nearly flat at ₹213 per kg, the same at the Siliguri auction center was down by ₹11 per kg at ₹187 per kg, the Tea Board data said.

While tea production in April in North India decreased by 8.74 million kg at 63.71 million kg compared to 72.45 million kg last year, tea production during the period from January to May 2023 increased slightly by about 6.37 million kg at 234.26 million kg. Orthodox tea production was around 29 percent higher at about 40 million kilograms during January-May 2023 as it fetched very good prices last year.

According to industry insiders, sentiment has been weak so far this year primarily on the export front due to the geopolitical situation, particularly in Russia, and with exports to Iran remaining a concern due to the lack of clarity on the payment mechanism. “It is early to estimate production as it usually rises during the peak season in July, August and September. The general sentiment seems to be affecting prices. Kenya has high stocks because Pakistan has not been importing and may be less likely to export from India this year (it seems to be affecting prices),” he said. Kaushik Das, Vice President and Group Co-Head, Corporate Sector Ratings, ICRA, said Business line.

Iran exports

Exports to Iran have not recovered yet and this affects the prices of traditional tea and affects public sentiment. Trade sources said Iran has stopped issuing preliminary registration orders required to import tea from India since November last year. Iran’s Ministry of Agriculture, according to available reports from some tea buyers, has been prevented from issuing the registration order. Tea buyers advised Indian exporters not to send any tea shipment until further notice as no shipment without order registration is allowed to enter any Iranian port by customs and the shipment must be returned to the country of origin.

However, last week some contracts were issued, and this is likely to improve sentiment. Iran is a major market for orthodox Indian tea. “Now that they’ve started awarding contracts, traditional prices have to improve,” said Sujit Batra, former secretary of the Indian Tea Association.

Production is likely to pick up in July as weather improves and the demand outlook looks good, said Vikram Singh Gulia, managing director, Amalgamatid Plantations.