Sale No: 39 of the auctions of Coonoor Tea Trade Association has gone down in the annals of contemporary tea trade as among the worst auctions on all three parameters – volume, price and earnings.
Exporters refrained from buying contending that they did not get the printed catalogue for the auction in time as normally done.
Besides, some exporters said that they have to wait for global transport situation to improve before investing on more teas in the context of the widespread shortage of sea containers. “It is not so much the orders from importers which worry us as much as the possibility to fulfil the orders because of container shortage. We are also spending time explaining to importers on the concomitant significant rise in the cost of transportation”, an exporter said.
In the absence of competition from exporters, internal buyers turned selective. Some upcountry buyers said that they paid the price matching with the quality of the teas on offer.
In effect, many lots, especially the high-priced teas on offer, had to be withdrawn for want of adequate bids and producers had to slash their asking price to reduce the pile of unsold teas.
This resulted in the average price crashing to ₹ 90.12 a kg. This was the lowest price not only in all the auctions held so far this calendar but since March 20, 2020, when the average price was ₹82.32 a kg.
Nevertheless, due to the low demand, the volume sold nosedived to 12.07 lakh kg. This was the lowest sale volume of the last six months; the previous low was 10.31 lakh kg sold on April 1.
Also read: Are tea auctions the correct price discovery platform?
Because of less tea being sold at low price, the overall earnings dropped to ₹10.87 crore – as much as ₹ 1.79 crore or 14.14 per cent less in just one week. This was the lowest earnings not only among all the auctions held so far this calendar year but since November 27, 2020 when the earnings were ₹ 9.29 crore.
No tea could fetch over ₹ 300/kg mark this week. The CTC Broken Pekoe grade of Homedale Estate, auctioned by Global Tea Auctioneers Pvt Ltd., (GTAPL) topped the entire auctions when Tea Services India Pvt Ltd., bought it for ₹ 297 a kg.
In the CTC Dust tea auction, Homedale Estate’s Red Dust grade, auctioned by GTAPL, topped at ₹ 280 a kg.
Among other CTC teas, Crosshill Estate Premium got ₹ 229, Pinewood Estate ₹ 211 and Vigneshwar Estate ₹206.
Among orthodox teas, Chamraj got ₹276.
In all, teas worth as much as ₹ 9.50 crore remained unsold as there were no takers for about 47 per cent of the volume on offer.