Financial Daily from THE HINDU group of publications
Monday, Mar 15, 2004
Agri-Biz & Commodities
Low demand pulls prices down at Coonoor tea auction
Coonoor , March 14
PRICES dropped at the tea auctions conducted here on last week by the Coonoor Tea Trade Association (CTTA), despite a lower volume of 8.16 lakh kg on offer because of a marked fall in demand.
The buyers contended that being the year-end, they did not have disposable money to fund speculative purchases. "Already, around Rs 1 crore of the buyers' monies are blocked with the Trade Associations in Coonoor and Coimbatore in the form of the contingency deposit to cover the eventuality of the tax liability if the Tamil Nadu Government disallows the CST rates for the inter-State transactions. Now, our cash flow is so tight that we have to be choosy in our purchases", a leading buyer told Business Line.
The buyers from quality conscious and high-price markets such as Gujarat, Maharashtra and Punjab were selective in their bids. "We had announced that from this week, for the next three weeks, the contingency deposit would remain suspended. Nevertheless, the upcountry buyers expressed their disability to buy high priced teas", pointed out an official of the CTTA.
"Such low bids cost us heavily. Almost 70 per cent of the high priced teas had to be withdrawn. Wherever sold, the volume was low", regretted an auctioneer.
With some buyers choosing to pick up the quality teas against specific orders, Darmona Estate teas fetched the highest price of Rs 90 a kg amidst the bought leaf CTC teas. Sree Ram Supreme got Rs 73, while Hittakkal Estate, Rs 70. Vigneshwar Estate, Garswood estate, IBS Estate and Iyyan supreme, were other teas which fetched over Rs 60. All others got lower price.
Hindustan Lever Ltd, (HLL), MB & Co, and Girnar did not buy the dust grades. HLL paid lower prices and picked up the leaf grades.
"Good liquoring CTC teas lost up to Rs 3 kg over the previous week. Other CTC teas fetched Rs 2 a kg lower. The plainest teas were hardly steady", noted the market report of the joint brokers.
The exporters, however, helped the market to sustain. The buyers for Poland markets bought bolder Pekoes for around Rs 36 a kg. The CIS buyers picked up BOP, BPOL and SBOP grades for around Rs 38. The goodwill created by the Indian cricket team going to Pakistan was reflected in the market here with the buyers paying a high price of Rs 41 a kg and picking up clean black CTC teas.
On an average, plain dust grades got Rs 33 a kg, while the good ones Rs 41. Plain leaf grades Rs 31 a kg, while the good ones Rs 40.
The market report said that for the next week, a still lower volume of 7.39 lakh kg has been catalogued.
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