Surplus tea availability decreases CTC tea cost

KOLKATA: Increased availability of tea in the auctions has pulled down prices of CTC black teas by 4%. The September crop was up by 36 million kg, which has just entered the market and has resulted in a drop in prices. The prices will go up only if November production is lower. The bulk of the Indian tea production is CTC teas. The CTC tea prices have slipped to Rs 127 per kg compared to Rs 132 per kg in 2010. Price of orthodox tea has slipped 17% to Rs 130 per kg from Rs 157 last year as tea exports to Iran have declined due to payment crisis. Iran is one of the largest buyers of Indian orthodox tea. Orthodox teas from Himachal Pradesh have also arrived at the auctions and are fetching similar prices of those produced in Assam and Bengal. From January to September this year, domestic tea production stood at 729 million kg against 693 million kg in the same period previous year. However, the Darjeeling tea prices have appreciated 16% due to increased demand in the domestic market. The average price of Darjeeling tea is hovering around Rs 340 per kg compared to Rs 293 per kg. "The price hike is driven by consumer demand. Indian consumers are gradually getting used to Darjeeling tea. The increased purchasing power has also contributed to this offtake," said Ashok Lohia, chairman of Chamong Tee (one of the biggest Darjeeling Tea producers). The regional packeteers from Punjab and western India are buying heavily at the auctions. Retailers in West Bengal are also buying teas in good volumes as the prices have dipped. However, the prices have improved for the small tea growers. Between October 8 and November 10, small growers were forced to sell green leaf to bought leaf factories at Rs 2-3 per kg due to a bumper crop. "For the last month, green leaves in Bengal and Assam have been selling at Rs 2-3 per kg on an average when the production cost was more than Rs 10," said BG Chakraborty, president of the Confederation of Indian Small Tea Growers Association (CISTA). Source: Times of India