Tea prices remain low despite tight supply. Higher export offtake may trigger price

Kochi auction ,

Statistics reveal that about 19.42 million kg (mkg) of CTC dust was sold at the Kochi auction between January and May compared with 19.04 mkg during the corresponding period of 2005. While the export volume was less than one per cent of the total sale at 0.15 mkg in 2005, it swelled to 12.5 per cent in 2006, leaving just about 87.5 per cent for internal consumption. Export quantities were up by 2.27 mkg this year resulting in a shortfall of 1.9 mkg in domestic supplies.

Market sources are expecting the internal supply shortfall to rise in the coming months and this in turn could trigger the price levels.

The reported drop in Kenyan tea production, Mr Kurien said could spark off higher export demand.

A glance at the crop production, export and average price that prevailed in the past decade shows that the price levels continued to remain depressed between 1996 and 2005, irrespective of internal supply shortage. The rates tended to move up only during years of higher export offtake, in spite of improved production/comfortable supply situation.

"Only during years of global shortage did India's tea exports shoot up. By accelerating our exports, we can expect better price for our teas,'' Mr Kurien said.