India tea prices fall as poorer quality offered at auction

Tuesday, 20 December 2011 00:00 - - {{hitsCtrl.values.hits}}

MUMBAI (Reuters): Tea prices in India, the world’s second biggest producer of tea, dropped at last week’s auction due to poorer quality of leaf on offer, dealers and industry officials said on Monday.

Price of CTC (crush-tear-curl) tea stood at 120.23 rupees per kg, down 3.51 per cent from 124.60 rupees at the previous weekly auction. Dust tea price fell 2.39 per cent to 114.85 rupees per kg.

“Prices were down because the quality of the tea on offer was lower than the previous auction. CTC is expected to trade in the range of 120-125 rupees per kg in short term,” said Kalyan Sundaram, secretary, Calcutta Tea Traders Association.

“Tea prices are expected to recover once supplies will come down by the end of January.”

India is likely to harvest a record crop of more than 1 billion kg in 2011 calendar year, compared with 966 million kg in 2010, a senior industry official said in September.

He expected the country’s exports to fall nearly 7 per cent in 2011 ro 180-185 million kgs due to payment problems with Iran and unrest in the Middle East.

India exports CTC tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia.

The country’s tea exports in October were almost steady at 19.69 million kg, according to the state-run Tea Board.

Exports in the first 10 months from January fell to 149.97 million kg, down 8 per cent on year, as demand softened for Indian leaf due to payment problems with Iran and unrest in the Middle-East in the first half of the year.