Many importers had driven hard bargains to get better prices of teas in view of the rupee volatility
Hard bargaining by many tea importers has prevented the industry from reaping the advantage of the depreciated rupee. Besides, a bumper crop in Kenya, the main competitor in the international arena, has only added the problems of Indian exporters.
Indian Tea Association Chairman A. N. Singh said many importers had driven hard bargains to get better prices of teas in view of the rupee volatility. “There is intense competition in the international market due to the bumper crop in Kenya,” he said. Kenya, which produces mostly CTC tea, has registered a 38 per cent increase in its crop between January and July.
Tea Board Chairman M. G. V. K. Bhanu told The Hindu that international tea prices were depressed this year due to bumper crop in Kenya. “Most of the price negotiation is done between June and August when the first and second flush teas become available. This was also the time when the rupee was most volatile,” he said.
He, however, pointed out that between April and September 7, while CTC prices were depressed, scoring a gain of only 10 paise in the auctions, orthodox prices were Rs.30 higher a kg.
While export figures are not available beyond March, Kenya, official statistics show, has clocked an 18.8 per cent rise in its exports, which have already touched 248 milion kg. (India’s annual exports hover around 200 million kg). Prices have dropped in dollar terms at the Mombasa auction centre.
The domestic tea industry is also concerned over the trend in prices, which fell between April and July in the auction centres in Guwahati as well as in Jalpaiguri and Siliguri in West Bengal. About 60 per cent of domestic tea is sold through the auctions route.
Tea production stood at 546.8 milion kg between January and July, which was 22 million kg higher than the same period in 2012.