Recession, inflation force European buyers to look for cheaper beverage
Unsold tea quantities, especially in orthodox grades, continue to rise in Kochi auctions, reaching 49 per cent this week - one of the lowest in the recent period.
Auctioneers Forbes, Ewart & Figgis cited the absence of export orders and subdued overseas demand as reasons for the increase in unsold quantities. The offered quantity in sale 27 was 3,21,411 kg.
The market witnessed a huge withdrawal in the absence of demand, especially from CIS and West Asian countries. They attributed the reason to recession and inflation prevailing in European countries, forcing buyers to look for cheaper teas.
The recent devaluation of the Sri Lankan rupee made tea from the island nation cheaper in the world market. Besides, delayed payments also forced exporters to slow down their purchases. Russia’s request for payment in dollars or Yuan also aggravated the situation, traders said, adding that stocks in warehouses are also rising in the absence of orders.
The market for Nilgiri leaves and brokens was lower by longer margin of Rs.5 to Rs.10 and witnessed heavy withdrawals.
The demand for CTC leaf was good with 80 per cent of the offered quantity of 26,000 kg sold. Medium bolder brokens was lower, witnessing some withdrawals.
Blenders support CTC dust
In CTC dust, the sold quantity was 70 per cent, with a good sale of liquoring teas mainly by blenders. The quantity offered was 9,87,079.80 kg. The market for popular marks was lower by Rs.1 to Rs.3. A subdued demand was seen from loose tea traders and upcountry buyers. Exporters were very selective and covered only a nominal quantity.
In orthodox dust, primary grades remained steady, while secondaries were lower.