Tea board cautious on inferior teas flooding South Indian markets

The rampant flooding of inferior and artificially coloured teas in the Kerala market through alternate routes from outside the State poses the greatest threat to this industry, the Tea Buyers Association of Cochin said. This has also undermined the legitimate tea trade in the region. While these issues have already been brought to the notice of the government through memorandum submitted by related associations and through the media, the Cochin Tea Buyers Association urgently demanded that this menace be rooted out.

Addressing the 38th Annual General Meeting of the Association, Mr Benzy Jose, the association's President said that the recurrent interest rate hikes, spike in prices of petroleum products and high working capital requirements have collectively thrown the tea trade industry into great difficulty. He urged the Tea Board to take necessary steps to encourage the producers to sell the maximum quantity of tea through the transparent and open e-auction channel.

E-auction system

Though the production of tea had marginally increased last year in the domestic market, global production had shown a comparative decline. Even as the e-auction system and online settlement through banks have made the working of the tea auction centre in Kochi work more efficient, the participants taking part in the auction continue to face several other problems. Mr Benzy Jose demanded that the tea growing areas should not be burdened in any other manner.

He said that it is a fact that quality teas would get support and fetch good price from the market. However, if there is a concerted effort to enhance the quality by the appropriate authorities, the availability of sufficient premium tea can be ensured in the national and international market which could lead to better price realisation for the producers.

L.N. Revathy reports from Coimbatore

The Executive Director of Tea Board, Mr R Ambalavanan, urged the members of the trade to desist from going in for private sale to get the maximum benefit of the auction platform.

Addressing the 29th Annual General Meeting of the Tea Trade Association of Coimbatore (TTAC), Mr Ambalavanan appealed members to put in more efforts to dispose the maximum quantity offered to boost the confidence of the sellers.

The total volumes offered at this auction centre during the first nine months of this calendar year stood at 20.26 million kg. The sold quantity however was only 13.95 million kg, accounting for 69 per cent of the offered volumes.

Conceding that the low average price realisation was another area of concern for the auction centre here, the Tea Board ED called upon the members to offer high quality teas to get better returns.

Referring to the return of huge consignments from Iraq, Mr Ambalavanan said, “Whatever may be the reason attributed to such returns or rejections, such situations become irreparable and cause a serious blow to the image of South Indian teas. Merchant exporters therefore ensure that only high quality teas are procured and exported.”

Quality assurance

The Tea Board is proposing to have proper quality assurance checks before shipment and also proposing to fix the minimum price level below which the export of teas would not be permitted. “A final say on this is yet to be ascertained,” he added.

On adulteration, he appealed to the members to help the Board isolate the perpetrators of colour added teas in the domestic market. “By using the loopholes in law, a few of these adulterators maximise their profits unethically and it is due to these unscrupulous elements that the image of the South Indian tea industry is getting adversely impacted. We should remain united to fight this menace,” the ED said, adding “it is all the more important to stay united as the sector is facing various problems such as global warming, seasonal fluctuation, labour shortage, unstable market and so on. We need to understand and work to get equitable and optimum returns using the potential of tea as a health drink.”

Later briefing presspersons, he said that the Board has identified about 10–15 people, who indulged in adulteration and are monitoring them closely. “While the guilty would be punished, the punishment for those indulging in such activities should be made harsher,” he said.

Shrinking acreage

Responding to a query on shrinking acreage, he said, “A survey finding revealed that 9 per cent of the area under tea was diverted. We will have to reconfirm this and take it up with the Government.”

Earlier addressing the 29th AGM, Mr N Anand, Chairman, TTAC appealed for getting the DEPB scheme for tea exports extended beyond the September 30 deadline till an alternative and better mechanism is introduced, as its discontinuance would dampen tea exports and affect tea prices.

The association drew the attention of the State Government to the dual VAT on tea and appealed that it (VAT) be made uniform at one per cent for all teas sold through the auction centres at first point of sale and the need to organise workshops to educate the trade to ensure smooth transition from the present VAT system to the proposed Goods and Services Tax (GST) before implementing the same.

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