28 October 1998
Russia keeps tea market on tenterhooks
THE tea market is waiting to see whether Russia will start making normal purchases of Indian and Sri Lankan teas.
Russia stopped buying tea in August, causing a fall of more than 10% in the price of Sri Lankan and south Indian tea.
The Russians have bought occasionally at the last few auctions in India and Colombo. Markets are encouraged that payments have been made for earlier payments.
In the eight months to August, Indian tea exports rose 14.05 million kilograms to 131.38m kg. Indian officials said exports in 1998 would fall short of the 205m kg target by at least 10m kg because of Russias withdrawal from the tea auctions in August.
India is trying to sell more tea to Iran, Libya and Iraq to make up the shortfall from Russia.
Prices for Indian tea have dropped since the Russian departure. Some experts reckon there will be 10% price fall next year.
Price falls, triggered by the absence of Russia are confined to low grades of tea. The medium-to-good crush, tear and curl (CTC) teas are selling at better prices than last year because of a growing domestic market.
India tea production is expected to finish the season with a crop of 835m kg, against 811m kg last year.
- Financial Times 28/10/98 page 36