India Tea Price Watch

June 19, 2021

The worst of the pandemic second wave seems to be behind us as the numbers of cases have come down in many parts of the country, and lockdown restrictions are slowly being lifted.

The focus now turns to production and prices across auction centres. In the south, the cancellation of auction for one week in June created more outlots and reduced prices. Several bought leaf factories sought the Tea Board’s intervention to fix a base price at auctions if they are to adhere to paying the district average green leaf price (currently announced at the beginning of the month. For June, the price was Rs 19.92 per kilo green leaf)). The factories noted that their average price dropped below INRs 100 in Sale 24 last week to INRs 98.75 from INRs 111.86 of the previous week.

PRICES

At the auctions for Sale 24, Kochi saw orthodox leaf do better than CTC leaf, with 94% of the offering sold. Exporters to the CIS countries and the Middle East were active. Good Nilgiri leaf saw a high of Rs 280. Average prices was not significantly different from the previous week.  INDCOSERVE and SupplyCo were selective. In Coonoor too, orthodox leaf fared better with 86% sold. Coimbatore continues to see low pickings hovering in the 50% range.

In north India, Kolkata and Guwahati saw better demand for orthodox over CTC tea. In Kolkata, only 52% of Darjeeling on offer was sold. Exporters lent fair to good support for orthodox tea while major blenders remained selective for CTC. In Guwahati, Hindustan Unilever was more active than Tata Consumer Products, for CTC tea.

Meanwhile, this week saw a special Sale 53 auction, where small volumes of tea plucked on May 21st, the International Tea Day, were sold.

PRICES FOR SALE 24

India Tea Price Watch – June 19, 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 6-22-2021

India Tea Price Watch

June 12, 2021

Even as the second flush is underway, the mood remains glum as the industry continues to deal with the many challenges.

Local media reports have been on rising imports of tea into India. In Darjeeling, producers have expressed a lot of concern about zero-duty imports from Nepal. Kaushik Basu, Secretary of the Darjeeling Tea Association has asked for stringent checks for quality of the teas coming in. The Association has also asked the Food Safety & Standards Authority of India to step up these checks.

In terms of production so far, Assam and West Bengal combined for Jan to May 2021 was reportedly down by 60-70 mn kilos when compared with 2019. However, prices remain firm and expectations are high for the months of June, July and August.

Meanwhile, on COVID second wave, the downward curve has begun, but only just in some parts of the country. In the Nilgiris, up until early June, the daily caseload was on an upward curve. A decrease in daily case load is hoped for in a week’s time.

PRICES

Sale 22-23 saw orthodox leaf fare better than CTC in terms of volume sold. In the south, Cochin saw good demand for Orthodox tea while CTC Dust saw fair demand with SupplyCo and INDCOSERVE in play.

In north India, Kolkata saw good demand for CTC and orthodox with Middle East and CIS active for orthodox teas. Only 53% of Darjeeling on offer was sold. Tata Consumer and Hindustan Unilever were active in Guwahati which saw good demand. Leaf saw better uptake than Dust. Siliguri saw about 70% of the offerings sold.

PRICES FOR SALE 22-23

India Tea Price Watch – June 12, 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 5-26-2021

India Tea Price Watch

June 5, 2021

While lockdowns continue, auctions resumed last week at all the major centres. In the Nilgiris, discussions on whether Bought Leaf Factories can open are still underway. Meanwhile, most of the tea regions continue to see rainfall. In Darjeeling, second flush has begun although the teas have not yet reached the auction.

Over the weekend The Telegraph carried a story on Darjeeling gardens and the challenges in production, labour and policies. Darjeeling’s annual production has reportedly come down from 8.5 million kg of made tea to 6.5 million kg of made tea for 2020-21. Further, imports have reduced from 4.2 to 3.1 million kg. Besides weather conditions, shortage of labour has brought down plucking rounds by nearly a third of what used to be 26 rounds a year.

PRICES

Sale 22 saw excess quantity in auction centres that had not operated in the previous week.

In north India, Guwahati saw over 90% of the orthodox tea on offer sold and over 80% of the CTC leaf sold. Dust saw comparatively lower pickings at 71% sold. What is more telling is the drop in production for the same sale week in 2020. CTC is at nearly half the volume but the drop is more acute in Orthodox at 6,448 kilos on offer as compared to 99,634 kilos of orthodox tea on offer last year.

At Siliguri 94% of the offering was sold. After a closed week, Kolkata saw good demand for all tea types. Tata Consumer Products and Hindustan Unilever were active for CTC while HUL was active in Dust as well. The Middle East and CIS countries were active in Orthodox sales

In south India, Kochi saw good pick up of Leaf. Good Nilgiris leaf sold for a high of INR 255 and a low of INR 190.00. Exporters to CIS countries and the Middle East were active. Both CTC and Orthodox Leaf saw nearly 95% of the offerings sold, much higher than Dust. CTC Dust enjoyed good support from INDCOSERVE and SupplyCo. Sales in Coimbatore were subdued as only about 42% of the total offering was sold. Coonoor fared better with 95% of the orthodox leaf on offer sold.

PRICES FOR SALE 21

India Tea Price Watch – June 7, 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 5-26-2021

India Tea Price Watch

May 29, 2021

There was no auction in Kolkata (in the north) and at Coimbatore and Coonoor (in the south).

At Kochi, auctions took place as warehouses were opened and samples reached local buyers although there were delays in them reaching upcountry buyers. Leaf tea saw in excess of 80% of the offerings sold. Prices largely remained the same as Sale 20, with some grades seeing a marginal increase and some, a marginal decrease. Orthodox leaf enjoyed fair support from exporters to CIS countries and the Middle East. CTC Leaf saw good support from major packeteers.  INDCOSERVE was not as active as in the previous weeks, and this is attributed to a drop in prices of Dust tea.

In the north, Siliguri enjoyed a good week as regional packeteers were in play. Quality teas enjoyed good sale, and 93% of the offering of leaf was sold. Guwahati too saw Orthodox tea do better than CTC and Dust with 93% of the offering sold.

Sale 22 is expected to progress as normal this week.

PRICES FOR SALE 21

India Tea Price Watch – May 29, 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 5-26-2021

May 24th, 2021

Challenges with labor, climate change, yield, and prices have remained a constant in the Indian tea industry. Abhijeet Hazarika proposes technology as a possible solution. Having spent three decades between two largest blenders, he has seen the different facets of tea. During his stint in the UK he had the opportunity to work on different projects involving technology. Post retirement he co-founded Fast Track Agrotech (FT) in partnership with a large technology company. FT is working on different technologies for the Plantation Industries. We spoke to Abhijeet to ask about how technology can be deployed with success in India, in particular, Assam.

Making Tea More Competitive

Aravinda Anantharaman: When the auctions shifted to e-auctions, was that the beginning of adopting digital platforms or tech in the tea industry? 

Abhijeet Hazarika: The tea industry was ahead of its time in the digital marketplace. Long before digital became a buzzword, the tea industry took this leap. In other major auction centres in the world the adoption was forced on them by the 2019 pandemic. So yes, the tea industry has been ahead in adoption and execution of the digital market place.

Aravinda: How relevant are auctions in today’s market? 

Abhijeet: Auctions are one of the many channels that producers and buyers use to  buy or sell tea. I for one have found this channel to have significant benefits in transparency and supply chain efficiencies. For a seller having guaranteed payment for teas sold is unique in any commodity sale.

Any process can always be improved. It is important for the auction system to consider its limitations against other channels of sale and innovate on these limitations. One area I personally believe would be standard codification of tea evaluation descriptors. Better still if these could be done to the extent possible with instrumentation and chemical analysis. If this were to happen the supply chain would be made very efficient as a standard description would be available against all tea offered for sale. That would be next step to digitalization.

Aravinda: Traditionally, how has the industry used the data and insights from the auctions to analyze patterns and trends? Has this been done? If yes, at what scale, and if not, why has it not been done? 

Abhijeet: The tea industry has always been very data rich. Data is available in all parts of the supply chain. Analytics and insights are recent trends. Tools like Power BI have made visualization development affordable. As data is available, I personally feel adoption will escalate especially among the younger managers. In the last few years I have seen that analytics tools that were affordable only to large organizations are now available as a service. This will surely help larger adoption of analytics and hopefully forecasting and optimization.

Aravinda: Your work in tech and tea – what does that involve? You are working on data but also on  tech on the field? Can you tell us a little more about this? 

Abhijeet: SAIL (Surveillance / Analytics/ Intervention / Learning) is a model that looks at the technology for surveillance such as drones and portable instrumentation (called Box on Bike) to monitor field conditions including yield parameters and pest management. Analytics to run algorithms that offer insights from the data (in real time to the extent possible). Interventions through digitalization of already existing processes like the Kamzari and Standard Operating Process in the estates. Learning from results to improve the process and algorithms including predictions.

We have been fortunate to be working with the largest tech companies in the world using the SAIL model. On-field trials using drones and instrumentation has started with the algorithm building. An excellent KPI-based Planner for the estates is available. Hopefully all this would come together in a year. The work being done with hyperspectral imaging for early pest detection is exciting.

Aravinda: Are we really equipped to adopt technology? On the field, what sort of training and connectivity and equipment is needed? On the data side, what do you think will draw more tea producers and traders to use tech?

Abhijeet: Technology adoption in my view follows proven results. Maybe funding for rapid technology in Tea is an opportunity. The approach we are taking is that for technology to be adopted in Tea it has to be Frugal, Simple, Sustainable and Safe. Limitations like connectivity and other challenges need to be considered. What was not possible a few years ago have become standard so one needs to build in the latest available solution early into the technology. For example, off line mode for data is now not a challenge as it was when we started in mobile data collection 5 years back. So yes, if the technology design addresses limitations faced in used It will be adopted.

Training is critical. However, it is best to build in simplicity into design itself. Today voice inputs and controls address earlier issues of data entry for example. In the SAIL model, Learning is critical to improve on training. When we started the drone experiment, we were not sure if we could train people but it just took a day to do it. What excites me about new technology is the way it can change the skills of people using them.

Tech will used when there is a business to for the stakeholder. It is true some will see it earlier and innovate faster. But a successful tech usually creates a new normal.

Aravinda: Who would you say will benefit most from the data and insights – producers or buyers or both? 

Abhijeet: It would depend on the business model to a large extent. Just-In-Time did a lot for a number of supply chain changes. So when the industry becomes more made to order led rather than made to stock, data would become very important to both the buyer and seller. However, unless it brings in a change to the cost improvement to all stakeholders there is no incentive for technology adoption.

Aravinda: What are you hoping to see, as change in how the industry becomes more tech savvy? 

Abhijeet: Having seen tech closely from the PC with a floppy drive to boot to cloud services of today I know for sure technology will bring changes. What I hope to see is data democracy with adoption of an instrument-driven codification system enabling made to order products. Reduction of avoidable costs to service the end customers most efficiently.

The tea industry is not competing with itself. Its main competition is other beverages. The question for me is how do we make tea more competitive in this space using technology in both traditional and new products