Commodities

Higher output in South led to a fall in prices: Tea Board

L N Revathy Coonoor | Updated on January 10, 2018 Published on September 13, 2017

Green signal Tea Board plans to focus more on small growers

But traders blame lack of participation at auctions by bigger players for the drop



C Paulrasu, Executive Director, Tea Board, attributed the drop in tea prices at the auction centres in Coonoor and Coimbatore to higher output of 20-million kg in South India this year.

Also, the insistence of Trusttea certification by major buyers, is seen impacting the prices, said Paulrasu.

He was speaking at the Commodity Outlook Session on Tea ahead of the 124th annual conference of the United Planters Association of Southern India (UPASI) on Wednesday.

Tea prices at the two auction centres have taken a beating, witnessing a fall of around ₹30 a kg to around ₹65 since the middle of July.

However, the trade says that the lack of participation by large buyers, such as HLL and Tata Global, led to a dip in the prices. Major buyers, such as HLL and Tata Global, used to source close to 80 per cent of the offered volumes.

GST woes

Trade sources told BusinessLine that the two buyers, after abstaining from the auctions from July 1 citing lack of clarity in the billing system in the post-GST era, have since started purchasing from their sub-agents, who in turn buy the teas from brokers. These purhcases are outside the purview of the auction system. But the ED of Tea Board refrained from stating anything about the billing system.

Details being collected

Paulrasu said that the board is giving a special focus to small growers, as they account for 44 per cent of the total production. The share of small growers in the overall output is inching up in the recent years.

The board has carried out a detailed exercise by collecting details from the manufacturers to understand the volume of green leaf they were sourcing from the small growers.

Tea quality

He conceded that there are issues when it comes to the quality of tea, and that the board is addressing this with the establishment of small growers’ development directorate. Every garden/estate should now focus on certification, added Paulrasu.

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Published on September 13, 2017
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