Growth in Tea Production Versus Exports Decline: War Effect on the Market

- Indications of changes in tea auction methods in the country: fear of further impact on exports if shipping rates increase due to increase in crude oil

At the global level, after the conflict between Russia and Ukraine, there are fears that the tea market and industry will be adversely affected by the recent war between Israel and Palestine. With the war atmosphere likely to affect tea exports from the country, sources in the Kochi market of Kerala in southern India said tea prices had recently fallen by around 4-5 per cent. India specializes in the production of tea known as crush-tear-curl i.e. CTC and orthodox tea in loose-tea-leaf form. Apart from this green-tea is also produced but it is comparatively insignificant. Exports of orthodox tea made in India are special. Indian tea is mainly exported to United Arab Emirates, Iraq, Iran and America.

Tea is mainly exported by sea. Meanwhile, in the first 8 months of the current year 2023, there were indications of growth in tea production in the country. During this period, the production of tea in the country has increased to about 80 crore 12 lakh kg. Out of this, around 15 crore 60 lakh kg of tea has been produced in South India.

The impact of increasing conflict in West Asian countries has recently been felt in India's tea markets. According to Kerala-Kochi market informants, tea auctions have recently seen a decline in the demand and price of tea. Market experts were showing fear that if the war worsens, its impact will be seen more in the tea market. According to the news received from Kochi, in the recent auction number 41, slightly more than 2 lakh kg of orthodox tea was put up for sale, of which only 70 percent of orthodox tea was sold. Compared to this, in the previous auction of tea, such percentage was recorded at around 81 percent. Tea market insiders were predicting more impact on the Suez Canal route as the conflict escalated in West Asia. Before the start of the war, the export of tea purchased from the Kochi tea oxen for export was made by the exporters against Iraq, Iran and Tunisia. There was more towards countries. However, after the start of the war, such demand in Oxon was seen decreasing. However, there were signs from the market that India's tea exports to the CIS countries were maintaining. However, India's tea exports to Israel are not special. However, due to the effect of war, the export of tea has been affected due to the impact of trade on sea routes. Due to the effect of war, the price of crude oil has increased again in the world market and due to this, there is a possibility of increasing the shipping charges in the transportation of goods by sea. There were also earlier payment problems with regard to tea exports to Iran. Meanwhile, according to sources at the government-owned T-Board, the tea auction system in the country is changing. Time line of implementation of English model in tea auction has been changed in various auction centers of North India. As Durga Puja will be celebrated from 23rd to 28th October, Auction-Sale No. 43 has been dropped. This has also been decided for auction number 44 and the pre-auction activity of auction number 45 will be done from October 30 to November 3. The sale of auction number 45 will start on November 6 at Kolkata, Gauhati and Siliguri. In CTC Tea, apart from the rules of minimum lot size and division of lots, other rules of English auction are to be followed. Meanwhile, according to T-Board sources, the Bharat Auction model is to be continued in South India tea auctions in South India. Meanwhile, in the first six months of the current year 2023, tea exports from India saw a marginal decline of 0.80 to 0.85 percent.