2022 has started with a lot of change brewing in the industry. 

A new agreement between Iran and Sri Lanka may impact India’s tea exports. Reports say that Sri Lanka has proposed to pay off their oil debts with orthodox tea, in a barter trade agreement. Iran is a significant importer of India, importing 53 million kilos in 2019. This had dropped to 29% in 2020 and even further in 2021 as US sanctions led to delays in payments. With the entry of Sri Lanka, India may see a setback once again.  

In India, the Tea Board is keen to keep its promise on reforms. A Tea Promotion and Development Bill 2022 is expected to be passed. A draft bill has been shared with stakeholders to collect their views. Opinions at the moment are mixed. 

India Tea Prices

Sale 2 in north India was not much different from Sale 1, in terms of sale percentages and prices. Gardens have closed for winter and available tea is from Dec 2021. In south India, Sale 2 proceeded in the new format. There was strong demand for dust leaf. Prices were steady. 

*New audio uploaded 1-13-2022

PHOTO CAPTION | CREDIT: Smallholders in Assam harvesting tea. Photo by Roopak Goswami, Assam, India

The first sale of 2022 was historic as south India opened with the new auction model, the Bharat auction. Piloted last year, it follows the style of the Japanese auction. The pilot met with antagonism from the buyers, yet the Tea Board rolled out the new auction. We spoke to industry stakeholders and at the moment, reaction to the Bharat auction is mixed. Sellers appear to be happy while buyers feel they are missing out on preferred lots or getting lots they didn’t want. There were some technical glitches. Sellers however were happy as the market was strong. But volumes were also lower at this time of the year. All in all, it’s still early days and it may take a few weeks to see how the new auction model is actually working. 

India Tea Prices

Sale 1 saw good demand. In north India, both Kolkata and Guwahati saw good demand for all tea types. Major blenders were active. The Middle East was active for Orthodox tea. In the south, demand and prices were not much different from the previous sale.

*New audio uploaded 1-13-2022

PHOTO CAPTION: Photo by Chaitanya Rayampally on Unsplash

While data for December 2021 is not available yet to show a consolidated production for 2021, reports indicate a projected decrease of 40 mn kilos as compared with 2019. Prices for 2021 have also been lower than 2020, but higher than 2019, which is used as the real comparison year. The drop in production has impacted prices positively.

2021 saw two major problems – a decline in exports and an increase in cheap imports. Tea Board data indicates that exports for the period January-September dropped by nearly 10%. However, the unit price of export increased by nearly 15% to Rs 272.86 a kg (Rs 237.30 a kg) during the same period.

Import of tea increased by 34% compared with 2020 (from 12.65 mn kilos to 16.97 mn kilos for the period January to August 2021), and by 50% compared with 2019. It is hoped that in 2022, quality and therefore prices will come into focus, and exports will resume even as domestic consumption increases. South India opens Sale 1 of 2022 with the new auction model, now named the Bharat auction.

India Tea Prices

Sales 51 and 52 saw good demand at auctions in north India. In the south, Kochi and Coonoor saw good demand for CTC Leaf. CTC Dust sold well across the south. Over 200 kilos of green tea on offer were not sold. There was no Sale 52 in south India.

*New audio to be uploaded 1-05-2022

PHOTO CAPTION: Young shoots for white tea in China. Photo by Li Ding

This week, news of Assam’s Manohari Gold selling for INRs 99,999 ($1315) per kilo at the Guwahati auctions grabbed headlines. This is the highest price in the auctions this year for specialty tea. And although Manohari Gold is a favorite year after year for their unbeatable prices, it appears that they have beaten their earlier records. Only 2.5 kilos of this tea was produced by the garden owned by Suntok Tea. 

In other news, Indian media reported that the Tea Board of India has said that the central government plans to allot about $13 million as part of the Tea Development and Promotion Scheme. This amount is earmarked for projects undertaken between November 2021 and March 2026. The small tea growers, in particular, will stand to benefit from this fund.

PRICES & MARKETS

In markets, Kolkata continued to see good demand for all tea types. The Middle East was active for orthodox while major blenders were active for dust tea. Darjeeling relied on exporters and local buyers. Guwahati also saw good demand with major blenders active for leaf and dust tea grades. Compared to Sale 49, this week saw marginally lower prices and more out lots. In the south, Kochi saw good demand especially for CTC leaf (81% sold and upcountry buyers were active). Coonoor saw a low sale of orthodox leaf at 58% and exporters were selective although upcountry buyers were active. 

India Tea Prices

*New audio to be uploaded 12-23-2021

PHOTO CAPTION: Tea plantation by Boon Chuay. Adobe iStock.

Demand Strong

Kolkata Sale 49 saw good demand for all teas. The Middle East was active for orthodox tea. Sales of Darjeeling and Dust relied on local buyers. Hindustan Unilever was active in Dust. Prices dropped marginally when compared with Sale 48; Darjeeling saw the biggest price drop of INRs 50. However, there were fewer out-lots of Darjeeling this week, compared to Sale 48. In Guwahati, the market opened to good demand with major blenders active for both CTC leaf and dust.

In the south, Cochin saw better demand for CTC leaf with brokens and fannings seeing some improvement in price from the previous week. Orthodox too got a marginally higher price. In Coonoor, 65% of CTC leaf on offer was sold. Major blenders were the main buyers absorbing nearly 54% of the tea on offer. Orthodox leaf and CTC dust also saw good demand.

India Tea Prices

*New audio to be uploaded 12-14-2021

PHOTO CAPTION: Shizhao, Zhuqi Experienced hands with freshly plucked tea. Photo by Kamonrat. Adobe iStock.