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Ukraine-Russia crisis: Tea exporters concerned as large volume remains unsold at auctions

Ukraine-Russia crisis - Tea exporters concerned as large volume remains unsold at auctions

Ukraine-Russia crisis, Tea exporters are concerned as a large volume remains unsold at auctions. In the previous auctions, around 32% of the stock had been left unsold.

A total of 15.44 lakh kg has been classified for Sale No. 9 of the Coonoor Tea Trade Association (CTTA) auctions, which will take place on Thursday and Friday. It is one of the lowest volumes in the recent year while being 20,000 kg more than the previous week’s offer. This comprises a large number of teas that were unsold in prior auctions. In the previous auctions, around 32% of the offer had remained unsold.

The arrival of new teas has not yet increased because output in January was lower than usual due to the harsh winter. Furthermore, the auction is being placed against the backdrop of Russia-Ukraine war crisis, which is causing exporters to be concerned.

Also Read | Russia – Ukraine war, export demand for Indian wheat, corn, spices skyrockets

‘Business in Europe as a whole is volatile right now. Orders from Russia, Ukraine, and the rest of the CIS, aside from Europe, have almost dried up as of now. Furthermore, exporters are not willing to transport tea to unclear destinations,’ said L Vairavan, an exporter.

Trade – Russia major importer

According to the most recent Tea Board statistics, Russia is India’s major tea importer and it purchased 34.09 million kilogrammes (mkg) from India in 2021. This meant that 17.44% of India’s total tea exports went to Russia.

Russia spent ₹612 crores in foreign currency to purchase Indian tea, accounting for 11.66% of India’s total tea export revenues. Russia imported a larger amount of 37.55 mkg worth ₹646.22 crores from India in 2020.

‘If exporters to these countries do not actively participate, the number of unsold tea may be reduced only if upcountry purchasers increase their consumption,’ Vairavan explained. The CTC (Crush, tear, curl) type accounts for 14.29 lakh kg of the 15.44 lakh kg offered in this week’s auctions, with only 1.15 lakh kg belonging to the conventional variety.

In both the leaf and dust grades, the proportion of orthodox teas remains low. Only 79,000 kg of leaf tea are orthodox, whereas 10.28 lakh kg are CTC. Only 36,000 kg of dust tea is traditional, whereas 4.01 lakh kg is CTC. In all, 11.07 lakh kg are Leaf grades and 4.37 lakh kg are Dust grades.

New price high point

Last week, Homedale Tea Factory continues to set new pricing records. ‘Our Red Dust grade, auctioned by Global Tea Auctioneers Pvt Ltd., (GTAPL), topped the overall auctions when Tea Services India Pvt Ltd purchased it for ₹400 per kilogramme. This is the highest price fetched by any tea in CTTA’s regular auctions this year, and it was also the highest price fetched by any tea last week. It is also the highest amount paid for any of our teas since production began in our facility in 1949,’ Homedale Managing Partner Raman Menon added.

Also Read | Ukraine conflict: India more concerned about agriculture exports – Finance Minister

GTAPL auctioned up Homedale’s Super Red Dust grade for₹ 370 per kilogramme. Homedale’s two grades, auctioned by GTAPL, topped the CTC Leaf tea auctions at ₹398 and ₹311. These were the only teas, CTC or orthodox, from any facility, purchased leaf or corporate, that sold for more than ₹300 per kilogramme.

Crosshill Estate Special and Darmona Estate received ₹281 points apiece, while Vigneshwar Estate received 241. Broker quotes ranged from ₹76-82 per kilogramme for ordinary Leaf grades to ₹148-219 for the highest grades. They ranged from ₹78-85 for basic Dust ratings to ₹155-212 for the finest grades.

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