Unsold quantities of teas especially orthodox leaves have started rising at Kochi auctions as the ongoing Russia-Ukraine conflict continues to affect the export demand.
Several exporters have abstained from operations due to the prevailing uncertainty especially with regard to shipments, payments and other related matters. The subdued demand is evident from the substantial drop in the average price realization in leaf sales by ₹15 per kg in sale 10.
The sold quantity in orthodox leaves was only 59 per cent out of the 2,00,233 kg on offer. Traders pointed out that the percentage of sale has come down both for CTC and orthodox grades by about 61 per cent compared to 65 per cent in the previous week, which is an indication of reduced procurement of overseas buyers. Exporters are not active in the market and many have reduced their procurement and kept it in godowns for future shipments.
Payments get stuck
A leading tea exporter in Kochi told BusinessLine that payments from Russia for earlier shipments are in limbo, as banks are reluctant to accept any bills from that country. Many tea shipments destined to Russia are now stuck in the transit ports of Europe, Colombo among others and not reached their respective destinations. “We are trying to dispose these cargoes to other CIS countries once the payment facility opens up”, he said.
However, the sector is pinning hopes on receiving exemption for the supply of food and pharma products in war-hit regions that would enable delivery of stranded tea shipments as well. Warehouses in Kochi and Coimbatore have tea stocks for the orders placed for future shipments, but it is much lower. This is mainly procured from South Indian stock, as North Indian season was over, he added.
A fair quantity of CTC leaf also remained unsold against the offer of 32,276 kg with a support extended by Kerala and upcountry buyers.
CTC dust sales went on smoothly with active participation of blenders.
e.o.m.