The continuing uncertainty over the conflict in West Asia is prompting tea exporters to adopt a cautious procurement strategy, resulting in subdued buying at the Kochi tea auctions, according to a report by The Hindu Business Line. The average price realisation for orthodox teas in Sale 28 stood at ₹186 per kg, down ₹4 from ₹190 in the previous week, auctioneers Forbes, Ewart & Figgis reported.
Supply-Side Constraints: Freight and Geopolitical Risks
Anil George Joseph, president of the Tea Trade Association of Cochin, said export-oriented orthodox teas continue to face headwinds due to weaker demand from key West Asian markets, higher freight and insurance costs, and payment uncertainties arising from the geopolitical situation. A tea exporter participating in the auctions said making fresh export commitments has become increasingly difficult, with freight charges having doubled and severe congestion at ports further disrupting shipments.
Cecil Jose of Festival Global Beverages noted that overseas buyers are cancelling orders because of uncertainty over shipping schedules, soaring freight rates, and the piling up of containers at various ports. "Shipping lines are increasing freight charges almost every day, making exports highly challenging," he said, urging the Centre to intervene to facilitate timely movement of cargo and ensure smoother delivery of export consignments.
Demand Dynamics: Domestic Support vs Export Headwinds
Despite the export slump, quality CTC teas continue to command premiums, supported by steady domestic consumption and institutional demand. The market for high-priced and popular marks of Kerala was firm to dearer by ₹2 to ₹3. The offered quantity in CTC dust was 7,11,095 kg, witnessing 87 per cent sales. All blenders together absorbed 69 per cent of the total CTC quantity sold.
Orthodox dust also received good demand with a sale of 93 per cent out of the offered quantity of 7,828 kg. Upcountry buyers and exporters absorbed a small quantity.
Key Auction Data (Sale 28)
| Category | Quantity Offered (kg) | Sales % | Price Trend |
|---|---|---|---|
| Orthodox leaf | 3,03,596 | 85% | Average ₹186/kg, down ₹4 from previous week |
| CTC dust | 7,11,095 | 87% | Premium marks ₹2-₹3 dearer |
| Orthodox dust | 7,828 | 93% | Good demand |
Outlook
With West Asia tensions persisting, export buying is likely to remain subdued in the near term. The doubling of freight charges and port congestion show no immediate signs of easing. However, steady domestic demand for quality CTC teas provides a price floor. Traders will watch for any easing of geopolitical tensions or government intervention to support exports.
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