|
| Branded tea producers to raise prices by Rs 20-40 a kg |
| BS Reporters / Mumbai/Kolkata May 15, 2009, 00:04 IST |
|
Faced with a supply shortage, tea companies have decided to raise basic selling prices by Rs 20-40 a kg across all varieties with immediate effect, marking the first increase this year. If the supply constraint continues, they may raise prices further by Rs 20 a kg next month.
The decision was announced at a joint press conference by regional and national associations of tea traders on Thursday in Mumbai.
Harendra Shah, chairman of the Federation of All India Tea Traders Association (FAITTA) and president of the Federation of Tea Traders Association of Maharashtra (FTTAM) said, “We know that the price rise will pinch our customers a bit but we cannot do anything as the prices of auctioned tea have increased by Rs 40-50 a kg.”
Lower quality of CTC tea is currently (pre-hike) quoted at Rs 160 a kg while medium and premium varieties are sold at Rs 180-190 a kg and Rs 270 a kg respectively.
According to Shah, Tata Tea, the largest branded tea retailer constituting 70 per cent of packaged tea sold in India, has also agreed to raise prices in order to avoid selling at a loss of Rs 40 a kg.
G P Goenka, chairman, Duncan Industries said, the company had increased prices and there was no sign of abatement in tea prices. “The next increase could be in June,” he said. Duncan has brands like Double Diamond and Sargam.
Deepak Khaitan, executive vice-chairman, Eveready Industries India, said, “From May 1, we have increased prices by Rs 40 a kg. By June-July, prices will definitely increase again.” Eveready’s brands are Jaago, Tez, Premium Gold and Classic.
The availability of tea through auctions has declined over 20 per cent from 60-65 per cent last year to 40-45 per cent of the country’s total output this year resulting in higher prices. At the same time, selling through the open market has increased substantially from 40 to 60 per cent in a year.
Khaitan said, loose tea prices were increasing Rs 5-6 a kg on a weekly basis.
Lack of rains has also forced small tea gardeners to halt plucking of tea leaves. Therefore, total tea leaves availability has declined over 25 per cent in the last one-and-a-half months of the current financial year. Plucking of tea leaves commences in March after about two months of maintenance closure. But, delay in rains or lower than expected rainfall hampers plucking of tea leaves. Normally, good tea crops require 5 inches of rainfall. About 4-5 tonnes of green tea leaves is required to produce a tonne of CTC (crush tear and curve) tea. About 90 per cent tea is sold in CTC form in the country.
Shah demanded imports be allowed at the uniform rate of customs duty at 7.5 per cent from the current varied level of 100 per cent from non-SAARC countries and 7.5 per cent from SAARC countries. He emphasised imports to be allowed from Kenya at lower duty to avoid further possibility of price hike. Shah also demanded restriction on open market tea sale.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
