Good Rainfall May Boost Tea Output, Down Prices

Tea auction centres around the country are likely to experience higher offerings in the coming months following normal rainfall recorded during May in the tea producing districts of Assam and Dooars.

According to the Federation of All India Tea Traders' Association (FAITTA), tea prices may now show a downward trend since the fear of a crop shortage, which had arisen earlier due to adverse weather conditions in the low cropping months, has been eliminated.

Ravi Agarwal, FAITTA chairman, said at an emergency meeting of the association's executive committee held in Calcutta recently that the crop shortage problem has been magnified by vested interests, and domestic tea buyers and distributors had to face acute problems due to artificial scarcity.

 

Tea distributors in the domestic market have reported that arrivals of tea consignments in Maharashtra, Gujarat, Delhi and other north Indian markets have shown satisfactory improvement. Since the rising trend in tea prices has slowed down significantly in trading circles, the fear of shortage which earlier prevailed among tea dealers no longer exists.

According to Agarwal, a gradual downward trend in tea prices can be effected if auctioneers apply fair business practices in their dealings with traders and distributors.

Moreover, the forces of demand and supply will ensure that auction prices are also able to settle down and find their own levels in tune with quality.

FAITTA had earlier stated in a letter to the union ministry of commerce that the current level of prices was also discouraging buyers on the export front.

Indian tea, as a result, was becoming increasingly uncompetitive , and this would adversely affect export earnings leading to further erosion of the export markets, the Federation of All India Tea Traders' Association said.

The association has urged stringent monitoring of tea prices by the ministry so that prices did not go up artificially as a result of tea producers withdrawing form the market in order to realise higher prices.