Tea slips below 2003 levels

Tea prices are hovering at a level lower than last year, despite the new season starting off without any carryforward stocks.

Kiran Desai, chairman Calcutta Tea Traders Association (CTTA), said the average tea prices were at Rs 67 per kg, which was marginally lower than last year's Rs 68 per kg.

Desai said, the lower prices were due to the drying up of markets. Major buyers were also abstaining from the market. The demand was for tea was ranging between Rs 65 per kg and Rs 68 per kg.

However, the mood in the industry was optimistic and it believed that prices would pick up as volumes were lower. Desai said, the volumes for the coming weeks would be even lower.

The volumes for sale 19 across Kolkata, Guwahati and Siliguri were at 1.42 lakh packages as compared to 2.45 lakh packages, last year. The closing for sale 20 in Kolkata and Guwahati were at 1.07 lakh kgs as against 1.39 lakh kgs.

Sources said, the industry was sitting at the edge of a spurt. But, a section of the industry felt that there was no demand as 54 per cent of the population belonged to the younger generation, who do not consume tea.

C K Dhanuka, chairman of the Indian Tea Association (ITA), said there were a lot of positive factors""the stock was at the lowest level, crop till April was down by 20 million kg and international tea prices were firming up, while international consumption had increased by around two per cent.

The tea consumption in India also increased by 18-20 million kg. Dhanuka pointed out that the only negative factor was that producers were facing liquidity problem and hence were selling tea at throw-away prices.

"They should demand at least Rs 10 more per kg for the teas being sold as compared to last year's prices" he said.

Another reason behind the optimism was that the industry believed that the export could not go lower than last year. The industry was banking on Pakistan to pick up more tea as also Iran.