The southern tea industry, which has been the worst hit last year, witnessed an unusual demand for teas, as the new year started with prices at the three auction centres of Kochi, Coonoor and Coimbatore clocking some 20-30 per cent increase. Claims of the recent developments, encouraged exports to Russia and an increase in internal demand notwithstanding, most in the industry are at a loss to attribute any reason for the recent spurt in prices.

Though the three auction markets failed to witness the same tempo as that of sale number one when 2001 started, prices of most teas were steady to firm.

``The mood last week was upbeat at the three auction centres. Coonoor opened on Thursday (January 11) with the same mood, but the same increases could not be maintained. There is good internal enquiry. Speculators are at work,'' said an industry source.

The Kochi auctions had seen increases of Rs 10-20 for smaller CTC leaves during the first sale of the year and the bolder type (mainly for the export markets of Russia) remained steady.

According to a source in Coonoor, lots of teas were taken out unsold during the second sale this week. The dust market in Coonoor was good and leaf was steady, according to the representative of a broking company in Coonoor. The Medium Dust is commanding around Rs 52-56 in Coonoor. In Coimbatore, the good liquoring ones moved up from last sale of 2000 (Rs 50-55) to Rs 60-65.

The movement was higher in the case of plainer varieties (medium to lower) which went up from 2000 year end price (sale 52) of Rs 36-39 to Rs 55-60.

The high grown BOPs moved to Rs 72 (Rs 68 for sale 52). Reacting to the increase in prices the United Planters' Association of Southern India (Upasi) said the cost of production of teas can not be recovered even at the current level of tea prices.

The average cost of production, according to the association, is around Rs 63. Moreover, the planting community is also not betting on sustaining the present momentum.