A subdued overseas demand for orthodox leaves is reported to have prompted tea exporters in Kochi auctions not to open any fresh LC for their shipments especially to Russia and Iran markets.
A tea exporter here told businessline that the deteriorating Russia-Ukraine war situation, absence of fresh orders from Iran and payment delays extending beyond 100 days are some of the contributing factors for not taking any new business commitments.
This has affected prices of medium quality teas which mainly find markets in Russia, while Iran buyers route their shipments via UAE. At the same time, upper and lower grades are finding markets especially from CIS countries, Iraq, Tunisia, etc, he said.
Cecil Jose of Encils Global Beverages cited the quality issues of Indian teas and its overpricing are the reason for the subdued export demand. Overseas buyers are quality-conscious and they are getting better quality varieties from Kenya, while medium varieties from Vietnam because of the disruptions in Sri Lankan market.
Moreover, Indian teas are priced in the range between $3.5 and $5.5 per kg and overseas customers are getting good teas at around $4 from these countries. Quality teas from India mainly go to western countries and secondary level to CIS, Russia, Iran, Iraq, etc. However, the rise in prices of these grades has forced buyers to scout for teas from other sources at lower prices, he said, adding that the delayed payments is also a factor for not taking any fresh orders.
The demand for orthodox leaf market was fair in sale 4 with only 68 per cent of the offered quantity of 3,05,850 kg was sold. The average price realisation was down at ₹155 against ₹162 per kg in the previous week. However, there was good demand for CTC leaf with 98 per cent of the offered quantity of 35,500 kg being sold. The market for brokens and fannings was firm to dearer in line with quality.