By Dan Bolton
Tea auctions around the world are experiencing disruptions that will quickly clog the supply chain and curtail the processing of first flush harvests.
Brokers and buyers in India, Kenya, and Sri Lanka face restrictions on gathering due to local and national lockdowns. Those who trade online are witnessing unusually high volatility in demand. Besides the large amounts of tea withdrawn at the last minute, ports are experiencing logistical challenges handling containers, and prices are in steep decline.
The Indian government ordered a lockdown of 1.3 billion people on March 24. A spokesman for the Guwahati Tea Auction Center said sales are on hold for 21-days. Prices fell 30%, and tea valued at $515,000 remained unsold at the Coonoor Auction, which trades in tea grown in the Nilgiris.
Bidyananda Barkakoty, an adviser to the North Eastern Tea Association (NETA), spoke with reporters after videoconferencing March 21 with government officials. "We decided to close down garden operations in Assam," said Barkakoty. "Human life is more important than anything else, and therefore, we will cooperate with the government," he told The Telegraph newspaper in Calcutta.
The Colombo Tea Auction in Sri Lanka was interrupted in mid-March by concerns over the possible spread of the novel coronavirus but resumed the following day. Quantities on offer showed a sharp decline to 3.9 million kilos, the lowest recorded since April 2009.
In Kenya, the Mombasa Tea Auction, which trades the biggest volume of tea in the world, was also postponed and relocated to the Sarova Whitesands Hotel for the March 26 primary auction. New rules imposed by the East Africa Tea Traders Association (ETTA) permit only one representative per buyer to attend. Brokers must immediately depart after selling their tea due to concerns about the spread of coronavirus. Clerks are no longer permitted on the auction floor.
Disruptions at the local port and low prices compound the situation. Last week three million kilos (20% of total volume on offer) remained unsold. The Kenya Revenue Authority "phased out" nine private cargo handlers at the port of Mombasa, leading to long delays, compounded by the decision to inspect every ship arriving from high-risk countries in the quay. Growers in Kenya, Uganda, Rwanda, Tanzania, Malawi, Ethiopia, and the Democratic Republic of Congo all rely on Mombasa.
Meanwhile, China is on the mend with Hubei Province now producing tea without restrictions. Chinese buyers showed renewed interest in purchasing Indian tea just as auctions shut down. India is the largest supplier of black tea to China, shipping 13.5 million kilos in 2019. Last year India exported 248million kilos of tea.