After hitting a record low at the start of the Russo-Ukraine war, tea exports from Kerala have started climbing.
Growth has been aided by revival of rupee-ruble trade and political uncertainty in Colombo.
The last few auctions have seen strong demand for the conservative leaf variety, with almost 90% of the total quantity offered at auction being sold.
As per auction details available with Forbes, Evert and Figgis Pvt Ltd. Ltd., Cochin, of the 2.24 lakh kilograms offered for sale sold around 87% in the last auction held on Thursday.
Before the war in Ukraine, about 89% of the export volume on offer was sold, but soon after it was a nosebleed and in the second week of March only 59% were sold on offer, with exporters responding to market uncertainties. The latter declined to bid. Sales have been increasing steadily in the last few auctions and out of the total 2.24 kg put up for sale, 1,95,965 kg orthodox leaf was sold in the last auction.
‘Average price up’
Moreover, the average price of orthodox leaf has climbed up to ₹172.93 per kg from ₹159.55 before the war. talking to HinduExporters said there was no problem of payment from Commonwealth of Independent States (CIS) countries, including Russia, after the commencement of rupee-ruble trade.
Besides, the uncertainty in Colombo prompted exporters to look for other options, benefiting South Indian tea growers. Exporters said the previous auction in Colombo was postponed due to a strike in the island nation.
Colombo is the main competitor for tea exporters from South India as its production is much higher than the latter. Exporters estimate that Sri Lanka’s tea production will decline by about 20-30% in the coming months as it briefly experimented with organic farming after the economic crisis.
‘High input cost’
Hence, the demand for South Indian tea will remain high at least for the next few months, he said.
Thomas Jacob, chairman of the Tea Trade Association of Cochin, said, “Inflation and high cost of production are major concerns for the growers here. “Moreover, if the issues in shipments are resolved, the market for the conservative variety will touch new heights,” explained Mr. Jacob.