Tea export earnings rise

INCREASE: At this week’s sale, a quantity of 5.96Mkg came under the hammer of which 1.11 Mkg were Ex-estate teas. Quantitywise, it represents a 20 per cent increase from last week’s auction.

Good demand for the better Tippy teas was witnessed as buyers from Iran and Dubai were showing a high level of interest whilst the CIS was also moderately active. Some well-made varieties finished the sale with significant price gains.

However, the Secondaries were met with less demand and were down, week-on-week.

The Select Best Pekoe’s that were lower last week pick-up whilst all other types remained firm to dearer.

The bottom OP and OPA’s gained by ten rupees or more with strong interest from exporters representing Libya. The Wiry types which were lower at the start of the sale improved significantly towards the finish.

In the currency market, the rupee moved from Rs. 110.80 to Rs. 110.81 against the US dollar. Exporters can expect a rate of between Rs. 110.80 to Rs. 111 during the coming week, according to analysts at BMR.

The latest data indicates that tea shipments during the first quarter of 2007 witnessed a drop of four per cent to 74.4Mkg as compared with the all time high of 77.8Mkg achieved last year.

Nevertheless export earnings rose as a result of a hike in prices stemming from supply-side fears.

The first three months of 2007 earned a total of Rs. 23.6 billion ($217m) compared with Rs. 21.7 billion ($213m) in 2006. Whilst the rupee has depreciated by around 6.9 per cent, it was the sharp rise in tea prices across the board that has resulted in the earnings hike.

The figure represents a record, surpassing the $207 million earned in 1998.

This week also saw the issue of permits for refuse tea re-ignited after the Government’s amendments to the Tea Act by the Minister for Plantation Industries.

A system of permits had been introduced, withdrawn and re-introduced over recent years in an attempt to allow the best of the worst to be consumed. The current annually renewable permit system costs Rs. 1,000.

However, the latest Government move to scrap the issue of permits is likely to hit hard on those depending on the sector. There are over 30,000 persons and one hundred small processing plants involved in the ‘refuse tea’ sector.

Bartleet Produce Marketing