Concern over a possible Iran-Israel standoff has prompted many tea exporters focusing on Kochi auctions to fulfil their export commitments at the earliest.
Exporters fear that the impasse between the two countries may culminate into a full-fledged war any time and is likely to push the freight cost that would hit tea shipments badly. To overcome the situation, exporters are busy completing their shipments commitments for March and April after receiving the payments from buyers, traders said.
This is evident from the strong buying demand for orthodox leaf grades, witnessing a higher sales percentage of 93 in sale 16 out of the offered quantity of 1,97,394 kg. The average price realisation was also up by ₹18 at ₹197.68 compared to ₹179.59 in the previous week.
Buyers active
Traders pointed out that tea exports had passed through difficult times in the beginning of the New Year till March in the wake of surging freight cost by over three times and it has started moderating from April. However, they are worried over the current stalemate between Iran and Israel which is likely to add up the freight cost anytime and hinder smooth dispatch of consignments to several overseas destinations.
Auctioneers Forbes, Ewart & Figgis said exporters to CIS and Middle East continue to be active along with the upcountry interest in the auctions.
Dipak Shah, Chairman of South India Tea Exporters Association, said Iraq has emerged as one of the major buyers for medium quality orthodox teas from South Indian auctions and the trend is likely to continue further. The rising temperature in many production centres has hit production badly. However, the summer showers in some areas have brought relief to tea growers which would enable one round of crop to hit the auctions in a fortnight.
CTC dust market was also dearer, especially good liquoring teas in which blenders absorbed 66 per cent of the offered quantity of 7,14,554 kg. Lots of teas were withdrawn from the auctions since the bids received were lower than the base price fixed on these teas.