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A strong export demand, and increased North Indian buying, lifted orthodox tea prices, at the Kochi auctions.
Traders said that 60-70 per cent, of the offered quantity of 2,45,558 kg, was procured by North Indian buyers, thanks to higher prices, and shortage of tea there. The purchasing trend is likely to continue, as the brew shortage, is expected to remain till June, before the next flush arrives.
The sales percentage in sale 25, was 95, out of the offered quantity, and the average price realisation, was up by ₹11 to ₹187, compared to ₹176, in the previous week.
The auctioneers Forbes, Ewart & Figgis, said a widespread demand, was noticed from exporters to CIS, Middle East, and other destinations.
At the same time, traders raised, also concern over the ship congestion, at transhipment ports, and container shortage which is likely to slow down tea shipments to overseas markets in the days to come.
Prince Thomas George, chairman of Association of Planters of Kerala (APK), said, that orthodox tea from the State, has a higher demand in international markets, due to its superior quality, and unique flavour profiles. To maintain competitiveness, it is essential to support producers through subsidies, that offset the high production costs. The installed production capacity of orthodox tea factories in Kerala, is 27.57 million kg, while the production hovers around 12 million kg, per annum, nearly 56.47 per cent, of production capacity, is unutilised.
The average prices realised for the orthodox tea, in FY23, is 26 per cent, more than the average price of CTC tea. There is a need to encourage utilisation of existing production capacity, to enhance the returns from unit area of plantation, and also to increase the overall production capacity of orthodox tea, he said.
Orthodox tea production is labour-intensive. By offering subsidies, the government can help sustain, and potentially increase employment in rural areas, he added.
Meanwhile, CTC dust market also witnessed a strong demand with blenders, together absorbing 64 per cent of 6,93,321 kg offered.
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