Tea prices rise at Coonoor auctions

A surge in the prices of tea was witnessed at the auctions in Coonoor as the visiting Pakistan tea industry delegation indicated doubling the import of tea to at least 20 kilogram during 2006 from the present 9.3 million kilogram.

Pakistan is considered to be a major consumer of CTC (crush, tear and curl) tea, the variety which is largely auctioned in Coonoor. Of the total 8.58 lakh kilogram which was on offer, more than 6.1 lakh kilogram belonged to the leaf category and the remaining to the dust category.

According to the quotations available with the brokers, the brighter liquoring grades were traded at Rs 64-70 per kilogram (compared to Rs 62 - 66 a kilogram last week) and received good enquiry from upcountry buyers such as Pakistan and Iran. The price of CTC grades were hovering around Rs 42-47 a kilogram, an increase of more than Rs 5 a kilogram, according to the quotations.

Internal or domestic buyers and corporates such as Hindustan Lever Limited (HLL) lent a fair support to the liquoring grades.

Pakistan started to import huge amount of tea from South India after Kenyan tea industry was badly hit by severe drought. This resulted in an increase in the prices of tea. Pakistan sources two-third of its tea requirement from Kenya. The quality of tea was good, but the rates had soared to about $2 per kilogram, an auctioneering source told Business Standard.

"There are a couple of good varieties of tea here which match the Kenyan blend, but the rates are too high. Pakistan is looking for good quality tea, but are unwilling to pay the price. We are ready to pay about $1 per kg," a Pakistani delegate said. However, the industry sources at Coonoor feel that it is not a viable proposition.

According to data available with the tea traders, Pakistan bought around 54,000 packages (of 70 kilogram each) last week. Kenyan tea alone has risen to 72,000 packages. It is expected to rise to 78,000 the next week and to around 1.11 lakh packages by mid-May.

"With low volume and better demand on the export front, the prices are expected to go up and the market will continue to remain steady for the next fortnight," an industry source said.