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ashnan
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Joined: 08 Jan 2001
Posts: 29

PostPosted: Fri May 26, 2006 8:05 am Reply with quoteBack to top

Storm in a tea cup
P.S.Sundar, Indeconomist.com, Sep 15, 2005

Taking a tough stand on sub-standard tea, the Tea Board created a history of sorts by burning in front of the UPASI headquarters in Coonoor, 2500 kg of tea. It claimed they did not satisfy the norms of the Prevention of Food Adulteration Act.

Even as the United Planters' Association of Southern India (UPASI) is preparing itself to organise its first-ever tea quality contest coinciding with its annual conference later this month, the Tea Board created a history of sorts by burning in front of the UPASI headquarters in Coonoor, 2500 kg of tea, which it claimed did not satisfy the norms of the Prevention of Food Adulteration Act (PFA).

So, quality has once again come under question, reversing the very claim of the industry, that to showcase the top quality of the South Indian tea and more so the Nilgiris teas, it was conducting not only quality contests, but even speciality tea auctions. The Tea Board, on the contrary, showcased that at least the teas from the small sector cannot claim that quality.

The burning of the teas has occurred even as the small growers and the factory owners in the Nilgiris have been pleading for a minimum support price in the wake of the miserable returns. The Board has, therefore, demonstrated that if the teas don't even qualify for the PFA standards, there would be no logic for the industry to claim a floor price or higher prices. Some sections of the industry have welcomed the bold action taken by the Board contending that this would rid the market of sub-standard teas.

Tough stance
Since the Board wanted to impress the small growers, it burnt the teas in their presence leaving them with a feeling that it would deal sternly with the factory owners responsible for the lower returns. The growers cheered the action. But the factory owners wondered what would happen if the Board were to take a similar step against those growers who supplied low quality raw material. With the Jayalalithaa government busy disbursing Rs.28 crore as subsidy to the farmers, irrespective of the quality of their harvests, casualty in field quality is alleged.

Industry also feels that the open burning of the teas with media fanfare would send wrong signals about the overall quality of the Nilgiris teas to the global market. More so, when the Tea Board had been claiming to have improved the quality significantly, through its upgradation programmes in the last five years.

Also, failing to satisfy the PFA norms does not automatically mean that the teas were adulterated. They could at best be sub-standard. One major reason for this could be poor raw material supplied by the growers. If the factories refuse to buy green leaves from the growers on quality grounds, the growers would be adversely affected, the manufacturers contend.

In effect, the teas chosen for burning were from those factories whose teas had fetched only Rs.20 to 25 a kilo in the auctions. This arose from the doubt that if the teas fetched such a low price, their quality would be bad. On examination of the samples drawn from these teas, the Board was convinced these teas should be destroyed. But, even as the burning was going on at the auctions, conducted by the Coonoor Tea Trade Association (CTTA), the prices of some lines of both the dusts and the leaf grades dipped to Rs.20 a kilo - the lowest range at which the prices were ruling in the recent weeks.

Falling prices
"We have been selling some teas at this price for the last couple of months. So, the burning of the teas had no impact in the market. It is the lack of activated demand which is pulling down the prices," said an auctioneer.

Although 16.02 lakh kg of teas were offered for sale, only around 5000 kg could fetch more than Rs.60 a kilo. The demand was sluggish and when the auctioneers tried to jack up the price, the buyers withdrew. Consequently, substantial quantities remained unsold.

Presently, the average price at the CTTA auctions is only Rs.29 a kilo - the lowest in the last 11 years. The last time prices dipped lower than this was in 1994, when the yearly average was Rs.27.79. Around this time last year, the prices averaged Rs.45.

Compared to last year, prices had fallen steeply. While the CTC teas fetched Rs.29 a kilo - Rs.15 lower than last year - orthodox teas lost Rs.19 to dip to Rs.39. The cumulative average price of all the teas sold at the CTTA auctions till mid-August was Rs.37.39 - the lowest in the last two years. But, housewives continue to pay anywhere upwards of Rs.75 a kilo. The 'Ooty Tea' packets of the government-managed 'Indcoserve' are priced Rs.90 a kilo. Even giving allowance for the blending and the difference in quality of the teas used in the retail market, the recovery of the price for the growers is a far cry.

http://www.indeconomist.com/150905_pss.html

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Ashok
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