Let price sharing formula be on annual basis: NETA

The tea industry has demanded that the price-sharing formula between green tea leaf sellers and tea factories be made effective on an annual basis as against the monthly basis envisaged in its present form.

The Tea Board had recently, vide a circular, said that the minimum price of green leaf payable for the month, district wise, would be determined after taking into account the average price of CTC teas sold through auction during the previous month and that no downward variation should be made for the entire month.

The district wise prices for the previous month would be uploaded in the Tea Board's website at the beginning of each month.

This would also form the basis for District Price Monitoring Committee for notifying green leaf price.

The tea industry is of the view that the "spirit" of price-sharing formula can be better realised if it is made effective on an annual basis.

It feels such a change would make the price-sharing formula "more logical and fair to all concerned."

"The proposed monthly minimum benchmark price would go against the price­-sharing formula which has no such provision. This would also bring in the issue of a minimum price for made tea as well. Instead, we propose that this be termed as adhoc price instead of minimum benchmark price," said Bidyananda Barkakoty, chairman of North Eastern Tea Association (NETA) in a letter addressed to MGVK Bhanu, chairman Tea Board.

Further the tea industry feels that there is "ambiguity" on the 'District Average Price' of CTC teas sold through auction. In the Guwahati Tea Auction Centre (GTAC), statistics of 'average price of Estate Factories' and 'average price of Bought Leaf Factories' are maintained separately - 'district wise' and 'weekly sale wise'.

The tea industry has sought a clarification from the Tea Board if bought leaf factories (BLFs) and those estate factories which have separate mark for bought leaf would pay adhoc price to green leaf suppliers based on their respective district average auction price of BLFs.

Barkakoty said that few buyers and sellers of green leaf have successfully developed their own mutually agreed pricing mechanism and that such arrangements should be kept outside the purview of the price-sharing formula.

"Some factories, buyers and growers and sellers of green leaf have very successfully developed a system of buying and selling green leaf based on mutually agreed terms and conditions including price fixation on an annual basis. As such, in cases where the concerned parties prefer to enter into an annual agreement which is to their mutual satisfaction, it would be prudent to allow such arrangements outside the purview of the price sharing formula," he added.