Lower volume fails to check tea price fall

Tea prices have moved down despite lower volumes, as compared to the same period, last year.

Industry sources said, prices in north India were down by more than Rs 9 per kg, while all India prices were down by almost Rs 7 per kg. At the Kolkata auctions, tea prices were lower by more than Rs 11 per kg.

During January to February, average north Indian prices were at Rs 55.89 per kg and south Indian at Rs 43.04 per kg.

The dip in prices took place, despite lower volumes. Till March, crop was down, though the actual estimates were yet to come in. The lower crop was on account of uneven rainfall and dry weather.

Last year, in March crop was up by 6-7 million kg. Till April in the previous year, the industry was facing a record crop with an excess of 31 million kg.

Sources said, tea during this time of the year normally fetches lower prices, as it is old. However, on a like-to-like basis, prices were lower than that in the previous year.

The industry was still hopeful that the new tea, which was expected to be in the market towards the end of April, would fetch better prices. Exports were also expected to look up from last year's level of 160 million kg.

C K Dhanuka, chairman Indian Tea Association (ITA) said that at present, it was a buyers' market. But, April onwards prices would move up sharply. He explained, sellers were disposing off tea to tide over liquidity shortage.

ITA would lead a delegation to Pakistan on April 5, in a bid to boost exports between the two countries. In 2003, the quantum of exports to Pakistan was to the tune of 6.4 million kg.

Sources said, over January and February another 1.5 million kg could have been exported to Pakistan. Last year, the tea producers of both the countries had a signed a memorandum of understanding (MoU), according to which Pakistan trade agreed to lift 10 million kg.