Financial Daily from THE HINDU group of publications
Friday, Mar 21, 2003
Financial Daily from THE HINDU group of publications Friday, Mar 21, 2003 |
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Agri-Biz & Commodities
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Tea `Tea prices starting to look up' L.N. Revathy
COIMBATORE, March 20 DESPITE the steep decline in South Indian tea production during the last three years, the dynamics of demand and supply has not been truly represented this far. For the first time this year, the price realisation at auctions has started to improve. The Chairman of the UPASI Tea Committee, Mr.N. Dharmaraj, attributes this to the initiation of auction reforms. He said "reviewing the tea market situation, especially after the introduction of the Tea (Marketing) Control Order, 2003, and the directions issued by the Tea Board on auction rules since the beginning of 2003, it is clear that the prices have started to look up. Although these are yet to stabilise fully, the supply and demand dynamics are beginning to get more truly represented". Commenting on the rates, he said the average auction price during the first eight sales in the South Indian auction centres in 2003 stood at Rs 46.68 per kg compared to Rs 40.75per kg during the corresponding last year. "The price realisation is 15 per cent higher," he added. The average price per kg of South Indian teas in January and February 2003 was Rs 43 and Rs 50 respectively, compared to Rs 41 in December 2002, despite a steep decline in production levels for the period ending November 2002. South Indian tea production has been heading downwards since 2001. Apart from failure of monsoon for two years in a row, the production set back has also been due to lack of application of inputs and crash in tea prices. Tea production dipped to 194 million kgs (mkg) in 2002 from 203 mkg the earlier year. An assessment made by the UPASI Tea Research Foundation showed that the production would further slip and hover around 180 mkg by the end of this year, Mr Dharmaraj said. On the initial disruption and boycott of auctions by a section of buyers, he conceded that substantial quantities offered at auctions had to be withdrawn, but pointed out that the withdrawn teas were marketed through private sales at price more or less equal to auction prices.
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