As buyers return, TN tea factories decide to withdraw stir

After a lull in trading activity at the auction centres in Coonoor and Coimbatore the past two weeks, the centres registered a comeback this week, with buyers and exporters (except the Tatas and Unilever) participating in trade.

They had earlier voiced strong objection to the billing system under the GST regime.

At Sale No 29, which took place in Coimbatore on Wednesday, as many as 52 buyers participated, against 30 bidders at last week’s sale, for the dust category. The average sale price this week dipped to ₹83.94 a kg (₹93.21/kg). Around 80 per cent of the catalogued volumes were sold compared to 28 per cent last week.

The average price of the leaf rose marginally to ₹82.16/kg (₹76.56/kg). Close to 73 per cent of the offered volumes in the leaf category was sold.

In Coonoor, close to 90 per cent of the offer volumes of tea leaf was taken up at the sale that was held this morning. Coonoor Tea Trade Association sources said they expect the trend to continue at tomorrow’s dust tea auction.

“This is in sharp contrast to the 95 per cent and 54 per cent left unsold in the last two auctions,” said HB Ananthan, President of the Nilgiris Bought Leaf Manufacturers Association.

With normalcy returning, owners of tea factories, who had earlier announced a shutdown till July 21, have decided to withdraw the move.

“We have decided to operate our factories from Friday and will start procuring the green leaf from small growers from tomorrow,” Ananthan said.

Small tea growers, who actually became the scapegoat in the stand-off between the sellers and buyers/exporters, heaved a sigh of relief.

J Manigandan, a small grower at Avalanche in the Nilgiris, told BusinessLine the steep decline in the procurement price of green leaf, from an average of ₹17/kg at the start of the calendar year to ₹10-11/kg in recent weeks, “is unviable”.

Emphasising the need to fix a minimum support price for the green leaf at (at least) ₹15/kg, he said: “The labour cost towards plucking is ₹5, and we incur another ₹1 each towards maintenance and fertiliser, taking the total cost to ₹7 per day. How can we possibly survive with a mere ₹3-4 a day?”

Meanwhile, H Thiagarajan, President of the Nilgiris Small Tea Growers Association, hailed the bought leaf factories’ decision to start operations from Friday. “It means a lot to us as there are over 65,000 small grower families depending on the factories for procuring the green leaf,” he said.

COMMENT NOW