The Tea Board is working on a plan to stabilise tea prices, both in the export and domestic market, by improving quality and coming down hard on industry malpractices.
Further, minimum benchmark prices for export can be arrived at that might not be mandatory for exporters and producers but might set a pricing precedence for the industry by improving quality and restoring the goodwill of Indian tea.
Tea waste has been a price dampener for the industry, both in the domestic as well as export markets, as a small segment of blenders mix this waste with the leaves to increase saleable quantity. The presence of such waste in tea is not only harmful to humans, but it also brings down the effective prices.
Industry officials are of the view that once such malpractices are stopped, not only can safe tea within the government prescribed norms be made available for consumers, but prices are also bound to increase.
"Some sellers are shipping tea in export markets at prices lower than the domestic auction. It is possible only if the tea grade is compromised or blended for lower value. Not only is it hurting export prices but it is also bringing in a bad name for Indian tea abroad," A K Ray, deputy chairman at the Tea Board, told Business Standard.
Ray said the Tea Board needed to work out some strategy whereby prices in private sales cannot be lower than the selling prices across auction centres and that controlling the quality of the final product was a key step towards this aim.
After an increased pro-activeness by the board in identifying such wastes, prices of lower grade teas in the Guwahati Auction Centre have already increased by Rs 10-15 a kilo to hover around Rs 120 per kg -- an unusual price at this time of the year.
However, the most impact has been felt in the auction centres in South India. The overall prices in Connor have increased by 36 per cent to Rs 101.89; in Coimbatore, it was up by 22 per cent to Rs 112.07; while in Cochin, the average prices hovered at Rs 124.40 -- up by over 12 per cent.
In the higher-priced auction centres in North India, the overall price in Guwahati was up by over two per cent to Rs 147.28, while in Siliguri, prices headed north by nearly 10 per cent to Rs 146.67.
Samples of tea across gardens and factories have been sent to various laboratories for quality and grade checking by the Tea Board and the results are awaited.
Sources in the Tea Board suggested that once such waste is identified as being mixed with tea, the produce will be burnt and action will be taken against the offender under the Tea Marketing Control Order, 1984.
During the lean months of December-February, when gardens across Assam, West Bengal and the entire North-East stop producing tea, some dishonest blenders and producers start mixing this tea waste with the harvests in stock. Although such blends are rejected in the auction centres, this tea often finds its way in the local market as "lose tea", as well as some low-income export markets.
Tea waste, as the name suggests, is the leftover residue in the tea making process, which is unfit for consumption.
However, this waste is bought by registered suppliers to make bio-fertiliser, extract caffeine and for other purposes. It is also sent to buyers in Africa in unblended form.
On the other hand, for the first time in the memorable past, the board has also issued circulars on the annual closure dates for tea factories to flush out sub-quality tea from the market. No leaves from the gardens in Assam and the adjoining North-East can be plucked after December 10, while in West Bengal, Sikkim and other North Indian states, the last date of plucking is December 15.
Till date, the gardens themselves used to decide these closure dates.
"During the winter, when gardens should remain closed, some pluckers continue to pluck leaves and sell it. It not only harms the tea stocks and prices, but also harms the reputation of Indian tea. It is good for the industry if such practices can be put to rest once and for all," Vivek Goenka, chairman at the Indian Tea Association, said.
At times, some growers produce sub-standard tea even after the official garden closure dates. It is not just detrimental to prices, it also harms the tea bush as well.
- Tea Board has started collecting samples from gardens and factories to monitor tea quality
- Factories and blenders mixing tea waste and leaves can face disciplinary actions
- Tea waste used for purposes to blend tea will be burnt
- Following sample collection process, prices across India have increased
- Tea Board has issued official garden closure dates starting December 10