The Russia-Ukraine conflict is likely to cause a stir in India’s tea bowl, particularly in South India, which accounts for over half of the country’s total tea exports. If the sale at the Cochin Tea Trade Association’s auctions last week is any indicator, the coming weeks will be vital for the country’s tea traders, according to tea exporters. At Kochi auctions, there was a lacklustre export market for orthodox leaf teas, particularly from Russia and Ukraine, with exporters opting out of most lots.
According to sources, the average price of orthodox leaf teas has seen a decline of ₹10 per kg, while there was a 5-10 per cent decline in the total quantity of tea on offer in all categories – CTC or orthodox, leaf or dust – in the absence of keen export buying. The 5-10 per cent decline would roughly translate into a loss of around ₹1.7 crore, according to the tea exporters.
Russia alone purchases more than 20% of the country’s total tea exports, with the Kochi Port handling the lion’s share of the traffic. While Russia imports roughly 37 million kg of tea from India out of a total of 142 million kg from other countries each year, Ukraine only exported 2.7 million kg last year. Exports to Commonwealth Independent States (CIS) and other European countries are likewise consistent.
In the backdrop of the war, the exporters are not ready to take the risk as as there is no clarity on the shipment of containers in transit to these destinations like whether they would reach destinations on time or not, said R.Sanjith, secretary of United Planters Association of Southern India’s (UPASI). Further, instances of payment for exports have been struck after several banks were denied access to a global financial system SWIFT and weakening of rupee against Dollar created a panic in the export sector, said Mr Sanjith.
