Indian tea exports are likely to fall with strengthening Rupee eroding the realisation, traders said.
The appreciation of the Indian currency has meant a loss of Rs 4-5 per kg of tea exports and exporters are cautious of entering into contracts.
Tea exporters are abstaining from buying at the auctions are adopting a wait and watch policy, Paulose Joseph of Forbes Ewart & Figgis told FE. He said that reports from Kenya, a major producer of CTC is also not encouraging as they are reporting a good crop.
According to figures provided by Upasi, Indian tea exports dropped to 62.3 million kg during January-May this year from 67.8 million kg during the same period last year.
Exports from south India stood at 32.2 million kg as against 39.7 million kg in the comparing period last year. Interestingly, the unit realisation has gone up from Rs 84.20 per kg to Rs 94.97 per kg.
Paulose feels that most of the exports done during January-May were contracted earlier at a different rate and at present exporters are not keen on fresh contracts.
However, Ullas Menon, secretary-general of Upasi differs and is optimistic about the exports picking up in the second half of the year. ?The first half of the year always shows a lower trend which is made good in the second half,? he said. Ullas believes that exports to Pakistan are likely to improve with the government taking an initiative to market Indian tea in Pakistan. Pakistan is the world?s third largest importer and consumes 150 million kg of tea ever year – mostly the CTC variety.