With demand for CTC teas rising, cos like Harrisons Malayalam focussing more on the local market

KOCHI: Despite a decline in exports, tea prices are looking up in the domestic market. With the demand for CTC teas rising particularly in the south, big companies like Harrisons Malayalam are focussing more on the local market by launching new brands in the auction market.

South Indian tea prices have risen despite a fall in exports in the first six months due to increasing local demand. The best quality CTC teas are fetching anywhere between Rs 90 and Rs 100 kg. The average CTC price till the middle of August this year was Rs 78.86 per kg, over Rs 4 higher than in 2010.

Encouraged by the response to good quality CTC teas, Harrisons Malayalam recently launched 'Moongalaar Gold', a new bulk brand made from its Peermade-Kumili tea estates, for auctioning.

"The company has decided to focus on the domestic market while continuing to develop the export market," said Pankaj Kapoor, managing director of HML, which had stopped the loss-making consumer packet sales a few months ago. The company is also bringing premium quality teas made from its estates in Nilgiri-Wayanad region and from the high ranges of Munnar regions to the market soon.

Kanan Devan Hill Plantations (KDHP) launched the Ripple brand CTC tea some time ago. "The tea has been receiving encouraging response from the market and we are in the process of consolidating the business," said Mathew Abraham, marketing manager of the company.

According to a leading tea broker, the per capita consumption of tea has gone up from 650 gram a few years ago to 1 kg now and it is growing every year. The festival season starting next week could further raise consumption.

Higher prices for CTC tea due to increasing domestic demand is a good sign as south India's CTC production caters to the local market which is more stable, said Peter Mathias, chairman of The United Planters' Association of Southern India (Upasi).

He noted that despite a drop in production, quantity sold at the south India auction centres were up by 2.3 million kg in the January-June period compared with the corresponding period last year. This pointed to a low carryover stock and hence prices could remain buoyant even if the production rises.

economic times