Kochi Tea Auctions Face Uncertainty Amid West Asia Tensions

Re-escalating tensions in West Asia have cast a shadow over the Kochi tea auction market, as overseas buyers exhibit increased caution in their purchasing decisions. The weekly intake of orthodox teas has seen a decline, with a higher percentage of unsold quantities reported in Sale 22. Auctioneers Forbes, Ewart & Figgis noted that the orthodox tea market remained irregular, with prices lower by ₹5 to ₹10.

Supply Side Challenges

The quantity offered at the auctions stood at 2,11,525 kg, with a sales percentage of 82. Despite active participation from Middle East buyers, support from CIS countries was moderate. Delays in payments from overseas buyers have prompted some exporters to temporarily pause shipments.

Demand Side Dynamics

Anil George, President of the Tea Trade Association of Cochin, highlighted that the sentiment for CTC teas is expected to remain weak, largely depending on quality. The market continues to be affected by the LPG crisis and reduced operations of hot tea shops in several markets. However, dust tea prices at Kochi are likely to improve towards the end of June as buying interest for the Onam season gradually picks up.

"The market is expected to stabilize after the second week of June with improved enquiry likely for better liquoring teas," said Anil George.

Price Outlook

The auctioneers reported that the CTC dust market was lower by ₹1 to ₹2, with all blenders together absorbing 72% of the offered quantity of 6,07,012 kg. The unsold quantity was also on the higher side. Higher North India second flush prices may lend support to quality South Indian teas, although crop levels may improve over the next few weeks following recent rains.

The sustainability of higher production levels remains uncertain due to erratic weather conditions and extreme heat. The market is expected to stabilize with improved enquiry for better liquoring teas, supported by higher North India second flush prices.