Indian Bank to step up finance for tea sector

Coonoor: Indian Bank has launched schemes to finance the small scale tea sector in the Nilgiris. “Before March 31, we intend to improve our presence in the Nilgiri tea sector. Our package covers all players - growers, green leaf agents, women workers, factory owners, traders and auctioneers,” P.N. Patel, Deputy General Manager and Circle Head, in-charge of the Nilgiris, told Business Line here.

Financial inclusion

He said that a branch would be opened in Kotagiri tea belt before March. Recently, the extension counter in Muthorai Palada was upgraded into a branch. “We have already brought in 100 per cent financial inclusion in the tea belts in the rural areas. We will be opening ATMs in Coonoor, Udhagamandalam, Devarshola, Pandalur and Gudalur before March 3. These will serve the tea interests,” he said.

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Patel said that the package for the small scale tea factories in the private sector ensures a loan at 11.5 per cent interest per annum. “We discover that most factories need working capital assistance and this scheme addresses this issue prominently,” he said.

“For growers, we are strongly supporting the Kundah Tea Revival Scheme, where the growers are helped to replant their age-old bushes with high-yielding clones. This spreads to a large area in the Nilgiris tea heartland of Kundah,” he added.

Rural artisans

On tea auctions, Indian Bank is a settlement banker for Tea serve. “We take care of the settlement needs at the e-auctions conducted in Coonoor every Wednesday,” he said.

Women workers are supported through Self Help Groups (SHG). “We are financing the members of SHGs to take on lease the harvesting of tea green leaves. In all, we have extended loans up to Rs 3 crore from the Coonoor branch to the SHGs. By March 31, we plan to increase this to Rs 5 crore. The repayment is 100 per cent,” said S. Panchalingam Senior Manager, Coonoor branch.

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Russian Ban on bulk tea imports

KOLKATA: Exports of bulk tea, coffee, rice, tobacco and sesame seeds to Russia have come under threat. The Russian authorities are reported to be considering a ban on imports of plant products from India on the basis of detection of kharpa beetle pest in an Indian consignment of sesame seeds that landed in Russia recently.

The ban is reported to become effective January 28. The Russian authorities have apparently taken the decision against Indian agri-items on the recommendation of the Federal Service for Veterinary & Phytosanitary Surveillance (FSVPS), under the agriculture ministry.

The Russian watchdog for animal and plant health has recommended the ban after receiving reports of presence of kharpa beetle pest in an Indian consignment of sesame seeds. When contacted, a commerce ministry official said, “We have unofficially heard about the Russian decision. To get a confirmation on the report, the ministry is in touch with the Indian embassy in Moscow.”

The unconfirmed report also suggests that the proposed ban will apply to Indian plant products coming from Third World countries even as Indian cargoes carrying those items come with phytosanitary certificates issued by the National Quarantine & Plant Protection Organisation of India, he added.

However, the proposed ban will reportedly apply only to bulk consignments of tea, coffee, rice, tobacco and sesame seeds from India to Russia and not on their arrival in packaged forms as they are outside the watchdog’s jurisdiction.

This has come as a major blow to the Indian tea industry, which is trying to make a renewed entry into the Russian market. Russia imports nearly 30 million kg of tea annually from India.

“We have also heard of a ban on bulk tea imports by Russia. The Tea Board has taken up the matter with the commerce ministry. The ministry has said that the matter is being dealt with through diplomatic channels. The ministry is hopeful of an early solution,” Tea Board chairman Basudeb Banerjee told ET.

It may be recalled that Russia had earlier imposed a ban on the entry of rice, sesame seeds and groundnuts in May 2007. After much persuasion, the ban was lifted from Indian rice in July and that on oilseeds in September 2007.

As for rice, the ban was imposed on the purported detection of demethoate in an Indian container while imports of India’s sesame seeds and groundnuts faced the ban due to presence of aflatoxin B1 and metallomagnetic admixture in a sesame seed container. After much persuasion, the ban was lifted from Indian rice in July and that on oilseeds in September 2007.

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Tata Tea net jumps to Rs 1,307 cr

MUMBAI: Tata Tea Ltd on Monday posted over 11-fold rise in net profit at Rs 1,307.31 crore for the quarter ended December 2007 as compared to Rs 117.19 crore in the corresponding quarter last year.

The total income of the group stood at Rs 1,189.65 crore for the quarter under review as against Rs 1,119.32 crore during the same period last year, up 6.3 per cent, the company said in a filing to the BSE.

The standalone profit of the firm decreased 37.5 per cent to Rs 58.88 crore for the reviewed quarter from Rs 94.20 crore in the same period a year ago. Meanwhile, the income grew 34.4 per cent at Rs 401.38 crore for the latest quarter as against Rs 298. 72 crore in the corresponding quarter last year. Shares of the company were trading at Rs 790.60, down 0.35 per cent at the BSE.

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Tea Prices Set to Soar With India Ban

Tea prices were expected to rise by as much as 30 percent after a ban on Indian plant products came into effect Monday, although special regulations may be introduced for tea and coffee imports.

The Federal Service for Veterinarian and Vegetation Sanitary Supervision introduced the ban after a shipment of sesame seeds was found to contain Khapra beetles, Rossiiskaya Gazeta reported Saturday.

The country's tea stocks are sufficient to last a month, after which there would be significant difficulties because Russia gets one-third of its tea from India, the newspaper said.

Komsomolskaya Pravda reported Saturday that the insects could cause 5.5 billion rubles ($225 million) worth of damage if they infested the country's stocks and that prices could rise 20 to 30 percent.

Ramaz Chanturia, deputy head of the Russian Tea and Coffee Association, said Thursday that an agreement had been reached with the watchdog about special regulation for tea and coffee, Interfax reported. He said the relevant documents had been drawn up and that he hoped they would be approved Monday.

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Tea shops downed shutters in Chennai

Chennai: About 10,000 licenced tea shops downed shutters here on Friday in Chennai protesting the "expensive LPG cylinder tariffs," and also pressing for some other demands.

At a time when the Central government is mulling hiking the prices of petroleum products, which also includes Liquified Petroleum Gas (LPG), the traders closed shops Friday, before putting up their own demands.

T Anandan, secretary, Chennai Metropolitan Tea Shop Owners' Association, said that Chennai has 10,000 licenced tea shops and another 5,000 of them without licence.

"The 19 kg LPG cylinders supplied to us are done under the commercial category, which costs Rs 1160 for a single unit. Star hotels in Chennai receive LPG cylinder supplies at the same rate, but we are not able to meet the expenses," he said while claiming one cylinder would not last for more than five days.

"A single shop requires 8-9 units a month," he said.

The 14 kg cylinders supplied to households at subsidised rates are priced at around Rs 258, Anandan said.

"We want the 19 kg LPG cylinder to be supplied at Rs 700 and the 14 kg one at Rs 500," Anandan said.

Presently, tea shops are not supplied with the 14 kg cylinder, he added.

In order to press for these demands, the traders on Friday took out a rally here and submitted a memorandum to the state goverment officials.

Chennai is a city which is dotted with tea shops at every nook and corner of the metro. More than a lakh people, directly and indirectly, are employed in the industry, Anandan claimed.

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Loan and subsidy distributed to 34 tea estates

Loan and subsidy were distributed to 34 tea estates in Kerala, Tamil Nadu and Karnataka from the Special Purpose Tea Fund constituted by the Union government at a function here on Saturday.

Union Minister of State for Commerce Jairam Ramesh, who distributed the cheques, said the fund for revival of tea plantations had been launched in West Bengal and Assam. The money was intended for re-plantation and rejuvenation of tea plants which were more than 50 years old. Out of 1,600 tea estates in the country which were eligible for the scheme, 479 had applied for it. The rate for South Indian estates were increased in consideration of the higher labour cost. The area to be covered under the scheme every year was being increased. The pruning height of plants was also being raised to benefit estates in South India. Fewer applications from the South were on account of the large number of small estates present in Kerala and other South Indian States which were not eligible for the scheme.

Though South India accounted for only 25 per cent of the country’s tea production, it had a share of 50 per cent of the export of tea. About 40 per cent of India’s tea growing area would come under the scheme within 15 years, according to the government’s estimates. Accordingly, re-plantation would be done in 11,000 hectares every year. An amount of Rs. 4,700 crore would be spent under the fund in 15 years.

He said the government would publish a notice on expression of interest for takeover of the closed tea estates for finding new owners under the powers vested with the government. The Minister made it clear that nationalisation of tea estates was not on the agenda of the government and that the estates would be entrusted with new owners. The process had already begun in West Bengal, he said.

The Minister said the government would encourage production of orthodox tea as there was an increased demand for it from abroad. There would be more subsidy for orthodox tea. The Minister stressed the fact that the scheme would be the last chance for rejuvenation of tea plantations. Sri Lanka, Kenya and Vietnam would overtake India if the country failed to increase productivity.

Referring to exports, he said Iraq was a big market for Indian tea, but payment issues had come in the way. Though tea was exported to Iraq from Kolkata, the consignments originated mostly from Kerala and Tamil Nadu. The exports to Iran, another important market, too faced problems arising out of letters of credit. The issues were being sorted out.

The Minister said the Indian cashew sector was under threat from Vietnam where productivity was three to four times that of India. A recent study conducted by the Union government revealed that 25 per cent of cashew was produced in Maharashtra, while Kerala accounted for 12 per cent. But 50 per cent of the cashew was processed in Kerala. The government was actively considering the proposal for setting up a Cashew Development Board for integrated action to promote the sector. A Global Cashew Alliance consisting of India, Vietnam and Brazil was under consideration. It would be an intergovernmental consultative body.

Basudeb Banerjee, Chairman of Tea Board, said 60 per cent of the target under the scheme had been met during the current financial year. The tea industry was comparatively not big in terms of turnover, but it derived strength from the number of people employed by it. The sector employed more people than those in the software sector and 50 per cent of the workers were women.

Labour Minister P.K. Gurudasan said the amount being distributed under the scheme should be enhanced. He wanted the Union government to discuss the conditions for distribution.

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