Strong supply cools tea prices at auction

Tea prices have dipped at auctions largely due to lower exports, leading to a higher supply in the domestic market.

The nationwide average auction price was Rs 70.09 a kg in June, lower by Rs 2.61 over the same period last year. North Indian auction prices were marginally lower at Rs 82.06 a kg, while South India auction prices were around Rs 49.35, lower than the previous year's rates.

Industry sources said the lower prices were a reflection of more supply in the market as exports were lower. The country exported 13.4 million kg in June, down by more than 6 million kg, largely led by a decline in South Indian exports.

The quantity offered for sale at the nationwide auctions was 31.7 million kg, lower by more than 7 million kg. However, the crop at 108.3 million kg was almost flat compared to the last year's numbers.

During January-June, the crop was around 334.7 million kg, up marginally by more than 1 million kg. However, exports during the period were 75.7 million kg, down by more than 11 million kg.

The average auction price was almost flat at Rs 64.54, while the quantity for sale was lower compared with the previous year's sale.

Industry sources said floods in Assam were likely to affect the crop and the arrivals in the coming few weeks would be impacted adversely.

However, the industry still expects to end the season with no carry-forward stocks.