The Hindu : Kerala News : Kochi regains top slot in tea auction

Online edition of India's National Newspaper
Thursday, Oct 14, 2004

Kerala

Kerala

Kochi regains top slot in tea auction

By Our Special Correspondent

KOCHI, OCT. 13. Kochi has regained its position as the premier tea auction centre in the southern region. The honour, at the expense of Coonoor, comes after a gap of five years.

This was announced by the outgoing chairman of the Tea Trade Association of Cochin, George Pothen, at the annual general meeting here recently.

Of the total offerings in all the three auction centres in the South, Kochi accounts for 44.59 per cent followed by Coonoor and Coimbatore with 35.74 per cent and 19.67 per cent respectively.

Production

Traders are of the opinion that the Indian tea market has the potential to be more buoyant this year after witnessing four years of continuous tumbling fortunes.

South Indian tea production during 2003 was 180.70 million kg, as against 178 million kg for the previous year. North Indian production was 663.60 million kg in 2003 compared to 631.80 million kg during 2002. The all-India production was 844.40 million kg in 2003 as against 809.80 million kg in 2002.

During the first six months of the calendar year the all-India production showed a substantial decline of 33.62 million kg compared to the corresponding period of the previous year. The future for January-June this year was 280.45 million kg and 314.07 million kg in 2003. This was mainly due to the substantial drop in crop in both North and South India.

Prices

In Kochi, the average price realisation during the auctions in 2003 was Rs.45.78 a kg when compared Rs.47.21 of the previous year. In Coimbatore it was Rs.38.30 a kg in 2003 and Rs.40.46 in 2002. In Coonoor it was Rs.34.55 a kg in 2003 and Rs.36.78 in 2002.

The average price realised in South India during 2003 was Rs.33.80 a kg whereas in North India it was Rs.58.69. This throws light on the fact that South Indian tea fetched 42 per cent lower price than that of North Indian tea.

However, the price prospects for future seem to be promising with a possibility of improvement of exports to Iraq and Pakistan and the expectation of more internal consumption.

Exports

The tea exports from India during 2003 were 173.10 million kg as against 201.04 million kg in 2002.

A high profile Russian tea delegation visited the Cochin auction centre during May 2004. However, there is a general perception in the Russian market that Indian tea is of poor quality in comparison to the tea from other countries like Sri Lanka. It is time that this impression is changed, leading exporters said. Producers and exporters along with the Tea Board should take positive and urgent steps to correct this notion, Mr. Pothen said.

Currently, Sri Lankan tea accounts for 50 per cent of the imports to Russia followed by China with a share of 25 per cent. Indian tea which accounted for eighty per cent during the Soviet era has now only 20 per cent of the market share.

New market

India has gradually increased the exports to Pakistan. From less than one million kg in 2001, the exports went up to 6.8 million kg in 2003. In 2004, it is expected to touch the 10 million mark. Kenya now holds 65 to 70 per cent of the market share in Pakistan, mostly CTC-oriented.

Egypt is another good market for tea. Over the past it has shifted buying from India to Sri Lanka. A delegation led by the Tea Board visited Egypt recently for promoting Indian tea.

The latest welcome move by the Government of Egypt is the reduction of import duty on tea from 30 per cent to five per cent. This is a highly appreciable and welcome move. The exporters here should take advantage of this situation and capture the lost market, Mr. Pothen said.

The Cochin Tea auction centre has become the third such centre in the country to go in for electronic system of auctioning. This is expected to bring more transparency in auction and dissemination of information.

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