India Tea Price Watch

July 24, 2021

In a significant development this week, the Tea Board of India issued a circular making it mandatory for producers to send at least 50% of their produce to the public auction. The circular lists more than 900+ gardens that failed to route at least half of their annual production based on audits of auction sales in 2019 and 2020. Producers that fail to comply face action. The board issued the directive to keep the “the auction system robust and bring stability in the price realization process”. Expectedly, producers are not happy.

Many producers have invested time and effort in cultivating private buyers. It must be noted that in October 2015, a similar order was passed and the entire industry had opposed it, which led to the Board shelving it. While producers’ associations have voiced their opposition to this order yet again, the only body that seems to be for it, is CISTA or the Confederation of the Indian Small Tea Growers’ Association. 

CISTA has also been in the news for seeking a minimum base price of INRs 25 per kilo of tea produced by small tea growers. In a letter to the union commerce minister, the association, representing 250,000 small tea growers, has said that a steady decline in the tea leaf price at INRs 15-18 has posed a problem. The cost of production stands at Rs 19, said the letter. The Bought Leaf Factories have been quick to respond and the Assam Bought Leaf Tea Manufacturers Association has decided to pay minimum benchmark price for green tea leaves and accept only the fine quality leaves, as per stipulations laid down by Tea Board India. This will be effective from July 27. The minimum price of green tea payable for the month will be determined by taking the average price of CTC tea sold via auctions during the previous month. Leaf quality will be determined by the requirement of fine shoots consisting of 2-3 leaves and a bud forming 65 per cent by weight of the green tea leaves.

PRICES

Prices at Sale 29 marginally lower than the previous week. In Kolkata, Darjeeling gardens, Turzum, Sungma and Goodricke’s Thurbo and Castleton fetched the highest prices, with Castleton’s Moonlight invoice topping the charts for the second week in a row at INRs 5,002. Among buyers, Middle East was active in Kolkata. In the south, orthodox leaf barely sold beyond 50% of the offering across the three auction centers. CTC leaf did not do well in Coimbatore and Cochin.

India Tea Price Watch – July 24, 2021

Source: India Tea Board | India Tea Auctions

*New audio uploaded 7-29-2021

India Tea Price Watch

July 17, 2021

Assam’s new state government continues to woo the tea industry with new schemes, the latest is that workers on tea gardens will be included in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which will benefit them in winter when the gardens are not producing tea. The announcement was that tea garden workers will be given jobs in infrastructure projects such as road building, tree planting and digging community ponds.

With 1,000,000 people making up this sector of tea garden workers, this is a significant bloc of voters for any political party. Interestingly, this week also saw the release of an OXFAM report titled, “In Defense of Living Wages for Tea Plantation Workers: Evidence from Assam” which has added to the debate around wages and cost of production, particularly in Assam. The study recommends a living wage of INRs 884 per day, accounting for a family of four and a minimum wage of INRs 285 per per person per day, assuming the estate will bear the cost of other facilities. Current minimum wage in Assam is INRs 204, following the recent wage hike of INRs 38.  The debate is ongoing as tea planters’ associations have refuted these findings and figures.

PRICES

Sale 28 saw slightly lower prices when compared with Sale 27. In the south, across the three auction centres of Kochi, Coonoor and Coimbatore, 4 mn kgs of tea were on offer, with 73% sold. Export buyers were not active but upcountry buyers were. 

In the north, Kolkata did well for orthodox tea. Tata Consumer Products was active in Guwahati and also in Kolkata for Darjeelings. Hindustan Unilever was active in Kolkata for CTC leaf and Dust. Second flush is largely over but top Darjeelings this week were Castleton which fetched the highest prices for its FTGFOP1 (Moonlight) tea at INRs 4511, an FTGFOP1 (Clonal) for INRs 2600, and an FTGFOP1 (Chinary) for INRs 1702 followed by two teas from Upper Namring that sold for INRs 1696 and INRs 1451. 

India Tea Price Watch – July 17, 2021

Source: India Tea Board | India Tea Auctions

*New audio uploaded 7-21-2021

India Tea Price Watch

July 10, 2021

This week, the focus is on declining tea exports from India, which is a cause of concern to the industry. The tea associations have issued a press release that the industry is bracing for a decline of 30-40 mn kilos this year, from 2020. The reasons cited are availability of low-cost teas in the global market (notably from Kenya and Sri Lanka), lockdowns that limit the number of foodservice venues in operation, and trade restrictions in countries that have been regular buyers. These have been compounded by economic downturns from COVID. The European Union, for example, anticipates 4.5% growth in 2021 but economists caution that the Delta variant may force a return to lockdowns this fall.

Between January and March India’s tea exports fell by 13.23% as compared with 2020, and 29.03% as compared with 2019, which in production volumes stands at 45.86 mn kg in 2021 as compared with 52.85 mn kg in 2020 and 64.62 mn kg in 2019. North India has been more severely affected compared with south India. 

Meanwhile, the Assam government launched the Assam Tea Industries Special Incentive Scheme 2020, to boost the production of orthodox and speciality tea. These two categories currently make up 11% of the total tea production in Assam with CTC making up the balance. As per the scheme, the state government will offer interest subvention of 3% per annum on working capital loan and a subsidy of INRs 7 per kg for production of orthodox and speciality varieties. Additionally, there is a 25% subsidy for purchase of new machinery towards orthodox and speciality tea production. The scheme is applicable for 3 years beginning April 1, 2020. The Chief Minister, Himanta Biswas Sarma also announced a INRs 500 mn publicity campaign for overseas market to promote Assam tea. Of interest is also plans by the state government to gradually take over the existing health and education facilities on the estates.

PRICES 

In north India, Kolkata saw good demand for well-made, whole leaf grades of Darjeelings while there were many outlots. Demand was mixed and among buyers, Middle East was active, while Tata Consumer Products was active in Darjeeling sales. In Guwahati, prices have dropped from last week, and significantly lower than they were for corresponding week in 2020, although they are better than 2019 prices for the same period. Sales in the south remained sluggish with the highest sale percentage reported by Tea Serve auction centre for CTC leaf, at 98%. 

India Tea Price Watch – July 10, 2021

Source: India Tea Board | India Tea Auctions

• Q|A Abhijeet Hazarika, on application of technology using SAIL model: Surveillance-Analytics-Intervention-Learning
• Q|A Raj Barooah, Director, Aideobari Tea Estate
• Q|A Sujit Patra, Secretary, Indian Tea Association (ITA)

*New audio uploaded 7-13-2021

India Tea Price Watch

July 3, 2021

COVID continues to lead the headlines although test positivity rates have dropped. The monsoon season continues across the country and Assam is on flood alert.

SALE 26

Sale 26 at the auctions saw fair to good demand for teas in the north. The south saw poor demand except at Coonoor, which showed fair demand for leaf tea. Kolkata and Kochi saw marginal price increase in tea. Guwahati saw good demand for leaf while Hindustan Unilever and Tata Consumer Products were active for Dust. Kolkata too saw good demand from blenders for dust. Orthodox tea saw strong demand from export buyers. Darjeeling too enjoyed good demand. Siliguri saw fair demand but prices were at a 7-week low.

In the south, Kochi saw a dip in prices along with higher volumes of unsold tea. Reports say that unsold quantity between the last auctions stood at 300,000 kg as opposed to earlier 100,000 kg. This decrease is attributed to the drop in out-of-home consumptions along with tea distributed along with essentials in the public distribution system. Only 38% of Orthodox Dust was sold. Coimbatore saw 35% of the leaf offering sold and only about 57% of Dust sold. 

We also tracked the prices of Darjeeling second flush in the retail segment. The prices for a selection of black teas were: (for 1,000 g) 

Source: Nathmulls

PRICES 

India Tea Price Watch – July 3, 2021

Source: India Tea Board | India Tea Auctions

• Q|A Abhijeet Hazarika, on application of technology using SAIL model: Surveillance-Analytics-Intervention-Learning
• Q|A Raj Barooah, Director, Aideobari Tea Estate
• Q|A Sujit Patra, Secretary, Indian Tea Association (ITA)

*New audio uploaded 7-6-2021

India Tea Price Watch

June 26, 2021

The highlight last week in Indian tea was the special auction conducted by the Tea Board of India across auction centers. The June 21 auctions featured a carefully curated catalogue of teas, plucked on the International Tea Day on 21st May. This special sale saw record prices that brought welcome energy and excitement to the industry. White teas, in particular, did very well with Darjeeling’s Badamtam tea estate topping the charts at INRs 27,650 per kg and Avataa’s Silver Needle (Excel grade) from the Nilgiris going for INRs 16,400 per kg. In Jorhat, Assam, mJunction which launched the tea e-marketplace in 2020 debuted their e-auction with the special sale, also offering premium teas that fetched high prices. Learn more…

SALE 25

Second flush tea has arrived at auctions and we expect busy weeks ahead. Overall, orthodox tea saw good demand across India last week. Buyers from Iran, Middle East, Russia and CIS countries have been active. In north India, CTC is seeing good response as top quality second flush is available in the market. In Kolkata auctions, the top 10 Assam orthodox teas sold for between INRs 500-1000. In the south, INDCOSERVE that has been a major buyer of Dust tea, was missed at Kochi last week. In all, Sale 25 did not see significant fluctuation in price from the previous week.

In other news, local media reported that in May, Tamil Nadu state saw the lowest average price for CTC tea from bought leaf factories or BLFs, at INRs 112.94 per kg from Coimbatore District and INRs 122.60 per kg from the Nilgiris with Arunachal Pradesh seeing the highest price for this sector, at INRs 294.17/ kg. 

PRICES 

India Tea Price Watch – June 26, 2021

Source: India Tea Board | India Tea Auctions

• Q|A Abhijeet Hazarika, on application of technology using SAIL model: Surveillance-Analytics-Intervention-Learning
• Q|A Raj Barooah, Director, Aideobari Tea Estate
• Q|A Sujit Patra, Secretary, Indian Tea Association (ITA)

*New audio uploaded 6-30-2021