Kochi Tea Auction Prices Drop Amid West Asia Tensions and Holiday-Led Slowdown

Kochi tea auction prices experienced a downward trend during Sale 42, driven by a subdued response from both overseas and upcountry buyers. The average price realisation dropped by around ₹6 per kg, accompanied by a rise in unsold quantities, particularly within orthodox leaf grades.

Out of the 1,78,240 kg of orthodox leaf tea offered during the auction, approximately 30 to 40 per cent remained unsold. According to traders, the weak demand was primarily influenced by the Puja holidays in North India and escalating geopolitical tensions in West Asia, which created a cautious environment for international buyers. Exporters also adopted a guarded approach amid reports concerning potential developments involving the US and Iran, alongside container shortages and rising shipping costs noted by auctioneers Forbes, Ewart & Figgis.

Anil George Joseph of the Tea Trade Association of Cochin pointed out that participation was limited due to regional holidays in North India, while buyers from West Asia maintained a selective purchasing stance. Consequently, whole-leaf grades faced weak demand and substantial withdrawals from the market.

At the same time, seasonal factors played a role in the market dynamics. The onset of the north-east monsoon in the high ranges improved crop quality, leading to increased tea arrivals at the auction platform and further contributing to the drop in prices. Prices for several tea grades declined by ₹5 to ₹10 per kg, with heavy withdrawals reported, though exporters to CIS countries provided fair support.

In the CTC dust segment, prices decreased by ₹2 to settle at ₹154 per kg, compared to ₹156 in the previous week. The total offered quantity for CTC dust stood at 5,90,994 kg, achieving a sales percentage of 78. Good liquoring teas witnessed a decline of ₹2 to ₹3, while low medium teas dropped by ₹3 to ₹4 and experienced heavy withdrawals. Overall, blenders absorbed 70 per cent of the total CTC quantity sold, and exporters maintained an active presence in the segment.

"This situation highlights how traditional commodity markets remain deeply vulnerable to external macroeconomic factors, including geopolitical tensions and logistics challenges like container shortages. For businesses operating in traditional sectors, managing supply chain disruptions and seasonal yield fluctuations requires agile inventory and distribution strategies. When global trade routes and regional holidays intersect to dampen demand, local enterprises must look at diversified export destinations and resilient domestic supply networks to stabilize realizations." — Dr. Shishir Gupta, Founder & CEO, StartupLanes