Rupee-Ruble trade, Lanka crisis boosts tea exports from Kerala


Tea exports from Kerala have started to rise after hitting a record low at the start of the Russia-Ukraine War.

The rise was helped by the revival in rupee-ruble trade and political uncertainty in Colombo.

The orthodox leaf variety has seen strong demand in recent auctions, with almost 90% of the total offered in auctions being sold.

According to auction details available from Forbes, Ewart & Figgis Pvt. Ltd., Cochin, sold about 87% of the 2.24 lakh kg offered for sale at the last auction on Thursday.

Before the war in Ukraine, about 89% of the export volume offered was sold, but soon after that things went downhill and only 59% of the supply was sold in the second week of March, with exporters abstaining from bidding due to market uncertainties. Sales have been steadily increasing in recent auctions and 1.95,965kg of orthodox leaf out of a total of 2.24kg put up for sale was sold in the last auction.

“Average price increases”

Also, the average price of orthodox leaf has risen from ₹159.55 per kg before the war to ₹172.93 per kg. Speak with PeppystoresExporters said there were no payment problems from Commonwealth of Independent States (CIS) countries, including Russia, after the rupee-ruble trade started.

Additionally, the uncertainty in Colombo had prompted exporters to look for other options that would benefit South Indian tea producers. The last auction in Colombo was postponed because of strikes in the island state, exporters said.

Colombo is the main competitor for tea exporters from south India as its production far exceeds the latter. Exporters estimate that tea production in Sri Lanka will fall by around 20-30% in the coming months as the country experimented with organic farming for a while following the economic crisis.

“High input costs”

The demand for South Indian tea is said to be high, at least for the next few months.

“Inflation and high input costs have been a major concern for producers here,” said Thomas Jacob, chairman of the Tea Trade Association of Cochin. “Moreover, if the supply issues are resolved, the market for the orthodox variety would reach new heights,” stressed Mr. Jacob.

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