Tea prices increased

AHMEDABAD: Your daily cuppa has just got tad a more expensive. Leading branded tea players including HUL, Tata Tea, Girnar, Wagh Bakri and Jivraj Tea have increased their prices and others are expected to follow suit. While tea leaf plucking ends in December every year, this year the branded tea prices have increased as the companies are facing high pressure on profit margins due to higher demand, reduced production and higher procurement prices across low, medium and premium segment.

The price of branded tea has increased in the range of Rs 1-7 per pack. According to industry sources, Tata Tea has increased the price by Re 1 and HUL has increased the price of its brand ‘Brooke Bond Red Label by Rs 7 (from Rs 98 to Rs 105 for 500 gm pack). When contacted HLL spokesperson said: “We have witnessed continued cost pressures in the tea category for sometime now. We are managing the cost pressures through a combination of cost effectiveness programmes, scale benefits and judicious price increases. We have taken selective price increases in our portfolio.” We do not comment on future/proposed price changes (increases or decreases) as a policy as it is competitive information, he further added.

HUL and Tata Tea, jointly control half of the branded tea market and the rise in both premium, medium and low segment tea categories compelled the firms to increase prices. Smaller players whose profit margins have already been affected due to rise in mid and low-segment tea are also implementing a price rise.

“We plan to up our prices as the cost of production has gone up. But the price-rise will be very marginal,” informed chairman and managing director of Jivraj Tea Viren Shah. The prices of several branded teas are expected to further increase in January and February due to off-season. The tea production too is not keeping pace with rising demand.

Total tea production of India is already expected to dip from 956 million kg last, to around 930 million kg this year. “The increase in demand is bound to put pressure on the branded players,” says chairman of Tea Board of India Basudeb Banerjee. The price of premium tea has increased from Rs 80-85 a kg to Rs 100-105 per kg. And the price of relatively lower-quality tea has jumped from Rs 62-65 per kg to Rs 80-82 per kg.

Read more...

29-week low offerings at Coonoor tea auctions

Coonoor: For the last auctions of 2007 to be held by the Coonoor Tea Trade Association (CTTA) through Sale No: 52 on December 27 and 28, the volume catalogued is the lowest of the past 29 weeks. An analysis of the catalogues shows that only 8.41 lakh kgs will come for auctions. This is some 60,000 kgs lower than last week. For the sixth consecutive week, the volume is lower than the 10-lakh kgs level.

Frost effect
Frost in many tea growing pockets has reduced the harvest and restricted the arrivals. Arrival totals 7.25 lakh kgs out of 8.41 lakh kgs catalogued now. The balance comprises teas remaining unsold in the previous weeks. Of the 8.41 lakh kgs, as much as 6.02 lakh kgs belong to the leaf grades and 2.39 lakh kgs belong to the dust grades.

Source: Sify

Read more...

Assam politics shadowed by tea votes

Politicians in Assam are at their wits' end trying to woo voters belonging to the reservation-seeking tea garden workers' community ahead of the staggered panchayat elections that begin on December 31.

Influential tea workers' groups like the All Adivasi Students' Association of Assam (AASAA) and the All Assam Tea Tribe Students' Association (AATTSA) have clamped a ban on the entry of politicians across party lines in areas dominated by the community.

The political class in the state of 26 million people has drawn the ire of this community, which decides or influences the poll verdict in 20 of Assam's 126 assembly constituencies, for not pushing their demand for Scheduled Tribe (ST) status for the Adivasis and the tea tribes in the state.

"We shall not allow politicians to campaign during the panchayat polls," Justin Lakra, leader of the AASAA, said.

The ruling Congress, that has been a favourite party of choice among the tea workers' community, too has been flayed by these groups for not doing enough to ensure ST status that would bring them reservation in jobs and educational institutions like their kinfolk in states like Jharkhand.

The Congress-led state government, however, has gone all out to convince the community that it was in favour of doing everything it can to improve their socio-economic status.

"The Congress wants that the Adivasis, along with five other communities in Assam, should get ST status. We are in fact backing their demand and are in favour of working towards the overall uplift of the Adivasis and other communities," senior minister Himanta Biswa Sarma, who is also an Assam government spokesman, told IANS.

All of a sudden, political parties have started fielding more candidates belonging to the tea workers' communities for the coming panchayat polls. The Bharatiya Janata Party (BJP), that already has some penetration in the tea garden areas, has fielded 21 candidates belonging to the tea workers' community in the eastern Jorhat district alone.

Assam has 800 tea gardens, producing more than 50 per cent of India's total tea production of around 900 million kg.

The Adivasis and other tea workers had migrated to Assam more than 150 years ago when the British brought them here to work in plantations from present day Jharkhand, Bihar, Orissa and Chattisgarh.

The central government has rejected the community's plea for ST status saying they were not indigenous to Assam and had lost their tribal characteristics after their migration to a new area.

The tea workers have rejected this argument and are bent on leading a sustained agitation to force the government to concede their demand, leading to a volatile situation in Assam ahead of the rural polls.

Source: The Hindustan Times

Read more...

Tea faces pricing pressure

AHMEDABAD: As tea production takes a dip, leading tea majors such as HUL, Tata, Sapat and Wagh Bakri seem to be facing pricing pressure. The jump in procurement price of tea in medium and lower segment is making things difficult for companies selling packed tea under this segment. The price of tea in this segment has increased by around 20-30% compared to last year.

The prices have increased due to lower production and higher demand. Unlike last year, which witnessed 3% jump in production, tea production is expected to dip to around 920 million kg. “As the economy continues growing at a fast pace, the tea consumption is rising.

However, the supply is not keeping pace with the demand. And the production is expected to drop by 30 million kg this year, thus increasing the prices of even cheaper teas,” says chairman of the Tea Board of India Basudeb Banerjee. Indian tea production has been rising consistently since 2000 except in 2002. Last year the total tea production was 956 million kg.

The tea production season is nearing an end in north India as over 75% of the area stops production by December. The tea estates in southern India, however, continue the production but the production goes down due to winter.

“December being the last month for tea procurement, we procure tea till May. However, as the prices of cheaper teas have gone up, we are procuring teas at higher prices for our mid-segment brands like Navchetan and Mili,” informed Wagh Bakri group’s tea tester Partha Mazumdar.

The companies selling packed tea under different categories, including premium and mid-segments, are paying significantly higher price. The price of premium tea has increased from Rs 80-85 a kg to Rs 100-105 per kg. And the price of relatively lower-quality tea has jumped from Rs 62-65 per kg to Rs 80-82 per kg.

“The tea growers have not got good returns in the last few years. So, even while companies end up paying more, high-price might help producers sustain and avoid closure of tea gardens and further ensure continued supply to the market,” says chairman and managing director of Jivraj Tea Viren Shah.

Source: The Economic Times

Read more...

Economic Survey says India one of largest tea producer and consumer

India is the world’s largest producer and consumer of tea. According to the Economic Survey 2006-07, tea production, after stagnating between 1997-98 and 2004-05 at around 830-850 million kg, increased by about 12 per cent in 2005-06 (930.9 million kg). Tea consumption in quantitative terms is growing steadily by three per cent a year.

The tea sector is one of the oldest and largest employment providers. More than a million people are directly and indirectly dependent on the tea industry for their survival. According to the Labour Bureau, GOI Occupational Wage Survey (Sixth Round, 2006), the total permanent workforce in tea plantations is 8.12 lakh with 54.24 per cent women workers. In the report, female employment reported the highest with 63.07 per cent in the tea plantations of Tamil Nadu.

Tea plantations in India were first set up by British colonizers in select climes for their vested interest. At present, tea is largely produced in Darjeeling, the Terai and Dooars region of West Bengal, Upper and Lower Assam, Peermade, Wayanad in Kerala and the Nilgiri Hills of Tamil Nadu. Types vary with the region.

Given the nature of an "enclave economy", where workers are dependent on tea estates for their income and survival, workers are thrown into situations of closure, abandonment, lockout and work suspension that deprive them of not just their daily income but also access to medical and other benefits such as maternity, drinking water and electricity.

In West Bengal and Kerala, the precarious situation has resulted in starvation deaths and suicides among tea workers’ families. This has accentuated their vulnerability as a marginalized community. Historically, workers have merely shifted from a situation of “total deprivation” to a situation of “bare subsistence”.

In Jalpaiguri, there are 13 abandoned and closed tea gardens. In Idukki district of Kerala, seven tea estates and six factories are abandoned, in Thiruvananthapuram district, one tea estate and two tea factories are abandoned. In Tamil Nadu, there are four closed tea gardens. In many of the tea gardens, owners do not declare the tea gardens as closed. They abandon them. The company has to apply for closure to close a garden. These companies owe huge dues not just to the workers in terms of Provident Fund and gratuity but also to the respective state governments and banks concerned.

Though certain pockets of tea growing states are in a crisis situation, the overall performance of tea as an economic product is improving. The annual average domestic price for tea was Rs 63.62 a kg last year and has been categorized as “Normal Year For Tea”. This sector is dominated markedly by big multinational companies that have amassed huge profits. For example, Tata Tea recorded an increase in profit of 40.8 per cent between the years 2003-04 and 2004-05.

The plantation sector is being restructured. Various stakeholders have analyzed the crisis in West Bengal and Kerala but a comprehensive understanding is yet to be reached. There are various factors responsible for the crisis that include poor quality of tea bushes or their neglect, change in the ownership pattern, monopoly and cartelisation of a few buyers, retailers and blenders. These factors influence prices at tea auction centers, contribution of the small tea growers' sector to production, absence of value-addition to tea and other structural reasons that are tea-garden specific. Violation of labor and basic livelihood rights is a reality.

Efforts are on by the Central and state governments to address the issues of closure and abandonment. The Center appointed the Ferguson Committee to give details of the problems and causes of closures/abandonments.

The Cabinet Committee on Economic Affairs cleared a Special Purpose Tea Fund in January under the 2006-07 Budget. The amount is estimated to be Rs 4,716 crore over a 15-year period. A process of setting up a plantation department by the Union commerce and industry minister Mr Kamal Nath is in the pipeline.

It was recently announced by his ministry that nine tea estates had reopened in Kerala and one in West Bengal after the government declared its rehabilitation package. It provides for the restructuring of outstanding bank dues, provision for fresh working capital, waiver of outstanding dues to the Tea Board and settlement of Provident fund dues in installments.

It is not clear, however, how the government will ensure proper utilization of funds without a transparent monitoring mechanism of the Special Purpose Tea Fund in places where trade unions are involved.

A monitoring committee represented by both state and Central governments and the Tea Board has been formed but has excluded workers’ representation from trade unions.
Every year, 15 December is observed as International Tea Day with the objective of affirming the rights of tea plantation workers. With the involvement of key labor research organizations in India and other tea-producing countries, International Tea Day has emerged as a global activity of workers and small-grower representatives. The countries include Sri Lanka, India, Bangladesh, Nepal, Vietnam, Uganda, Kenya, Malawi, Tanzania, Zambia, Malaysia and Indonesia.

The first International Tea Day was held in New Delhi in 2005 and the second in Sri Lanka, last year.

International Tea Day observations and deliberations have contributed towards an international alliance and attracted the attention of the governments of India and Sri Lanka to address issues in the tea sector.

There is need for further collaboration and action, besides addressing larger concerns vis-a-vis multilateral institutions such as the Food and Agriculture Organization of the UN and the International Labour Organization.

The International Tea Day network affirms the principle of a living wage. It states that the living wage should not be less than the minimum wage and de-linked from tea prices. Wage increment should be in congruence with the cost of living across countries. A campaign for an international commodity agreement for tea would ensure price stabilization of raw and manufactured tea. The International Tea Day is attempting to address the inequities in the global tea trade. Trade unions have historically played a vital role in implementing labor legislation in the plantation sector. There is the need for all workers and trade unions to take a united position and International Tea Day is an important occasion to affirm workers’ rights.
It is relevant to observe International Tea Day across all tea-producing areas in India as it would provide a common platform to discuss issues common to tea workers. Indian tea trade unions demand the immediate reopening of closed and abandoned tea gardens in Kerala and West Bengal. More than 30,000 workers have been affected.

(The author is general secretary, United Trades Union Congress, West Bengal state committee.)

Read more...

Country could close down with low tea production and tea exports

KOCHI: Downturn in production and export has hit Indian tea’s prospects in the current year. As activity in the tea industry slows down during winter, the country could close 2007 with lower production and exports, industry sources said.

Most major global tea producers, except India and Sri Lanka, have shown an increase in tea production during the year. Kenya has recorded the maximum increase, which has affected Indian exports.

Industry sources attributed the lower production in India to the prolonged rains during the year. Production is down 17.53 million kg at 689.26 million kg for January-September, compared with the same period in the previous year. For the same period, Kenyan production is up 63.48 million kg.

With just three months to go, production is unlikely to touch the level of 956 million kg achieved in 2006, sources said. In fact, Indian tea production has been rising consistently since 2000 except for a bad year in 2002. All-India tea production was 847 million kg in 2000, as per Tea Board figures.

The situation is far worse on the export front. Till September, exports were down 37.16 million kg even as Kenyan exports rose 28.75 million kg. Indian exports for the nine-month period stood at 118.74 million kg. Lower exports to Iraq, coupled with the rupee’s appreciation, have been instrumental in pulling down total exports, which had touched 203 million kg in 2006.

“Indian exporters have not been sending tea to Iraq since March as the payment for the earlier consignments are still due. Iraq is now buying more from Sri Lanka and Vietnam,’’ said leading tea exporter Krishnakumar J Shah. Last year, Iraq was the largest purchaser of Indian tea at 40 million kg. This year, till June, exports to Iraq were down 20 million kg. Purchases by Pakistan have also gone down. With an improved crop situation, Kenya is supplying more tea to Pakistan. With lower production and exports, the average price of Indian tea in auctions was down Rs 1.27 per kg at Rs 65.14 per kg till September.

Source: The Economic Times

Read more...