Traders withdraw tea on global supply crunch, low bids

The global supply shortage of tea and the refusal of producers to sell at low bids have resulted in the withdrawal of heavy volumes of teas at the two auction centres "� Coimbatore and Coonoor.

Anticipating an increase in prices, producers are holding back the teas waiting for the market to stabilise, according to an auctioneer.

Buyers from Pakistan, who lent a fair support in the last few sales, refused to pay the same levels as before contending that the traders there were able to get cheaper grades.

Varieties for which they had paid around Rs 60 a kg are now being bid for Rs 40 a kg. In most cases, auctioneers have refused to accept these bids and chose to outlist the teas.

"Even though it is true that we need the support of Pakistan, we cannot sell our produce at low bids. Pakistan is yet to get its usual consignment from Kenya, where there is a crop loss due to drought. We are awaiting fairly reasonable bids from Pakistani buyers," a plantation source told Business Standard.

On the whole, some 40-45 per cent of the total offer of 8.7 lakh kilo tea has been withdrawn at the Coonoor auction centre. At both the auction centres, nearly 65 per cent of the plainer CTC leaf grades have been withdrawn.

A lower price persisted for almost all varieties of the tea at the auction centres this week. In the leaf grades, plain varieties traded for Rs 41 to Rs 44 a kg and bright liquoring grades around Rs 71 per kilo gram.

In the dust grades, plain varieties traded at Rs 43 a kg and liquoring grades at Rs 65-72 per kg.