Tea prices dip as exporters keep away from auctions

The tea industry which appeared buoyant on the export front for the last five sales, suffered a setback this week due to a fall in enquiries from exporters. The spiralling rise in prices of tea this week seems to have kept the exporters away from the auctions.

Tea prices, after soaring by an average of Rs 5 to Rs10 in the last couple of weeks, recorded a dip of Rs 3 to Rs 4 a kg. Though the internal buyers were active, the trend continued to be dull.

The prices had shot up to unrealistic levels. A steady rise of Rs 3 to Rs 4 a kg (in the weekly sale) is considered normal. But last week, the price increased by Rs 8-12 a kg and in the earlier week, it was up by Rs 10 a kg.

"We are sure this trend would not last. We expect the price to slip by a minimum of Rs 5-8 a kg from the current levels," sources said. A sudden rise in prices may also be attributed to the exporters' commitment for immediate shipment to Pakistan and Kenya, sources point out.

However, the auctioneers expect the market to bounce back soon, because of the anticipated shortfall in production and the higher demand.