Tea Prices Decline Due To ‘Adulteration’

Kochi: Tea prices fail to pick up despite drop in production in India so far this year due its alleged adulteration coupled with the declining trend in the world tea prices.

The Indian output so far has declined by about nine million kg while there has not been any a drop in consumption. And yet the prices failed to pick and have been showing a declining trend, J.K. Thomas, Managing Director, Malankara Plantations Ltd, Kottayam, told Business Line.

Adulteration of tea was on in three to four factories in the Nilgiris. Last year, when the Executive Director of the India Tea Board had initiated action against the adulteration, it could be arrested effectively and that in turn contributed to increase in tea prices, he claimed. But, this year, due to political interference, no action could be taken so far, said Thomas, who is the immediate past President of the UPASI.

At least 20-25 per cent of the teas sold in Andhra Pradesh, Tamil Nadu, some parts of Kerala and Karnataka “at Rs 25-35 a kg are adulterated product as given the high cost of production it cannot be sold at this price,” he alleged.

‘Mixing’

Cashew nut husk and some other non-tea matters are mixed with the teas apart from adding some colour, he said. “This is a serious issue and, hence, the Government should take stringent action,” Thomas said.

According to him imports cannot be construed as a reason for the current price trend. The prices should have moved up when there is a substantial fall in the tea output.

Fall in Exports

Meanwhile, some of the industry sources told Business Line that the sharp fall in exports to Iraq, which has dropped by 20.07 million kg (mkg) during January-June from that of the corresponding period last year also contributed to the declining trend in prices here. Payment problems are pointed out as the reason for the fall in exports to the war-torn country.

Shipments to Pakistan also fell to 2.21 mkg from 5.79 mkg during January –June last year probably because of the critical political situation there. However, exports to the CIS countries showed an increase of 4.42 mkg to 23.81 mkg from 19.39 mkg.

Drop in global prices

Add to this, the international prices have dropped following tangible rise in the Kenyan tea production, which had gone up to 221.52 mkg in January –July from 157.89 mkg in the same period last year. The average auction price during January–August in Mombassa had declined to $1.63 a kg from $2.03 a kg in the same period last year.

However, the price in Sri Lanka had moved up due to fall in output by around 20mkg, they said.

Total world output of tea has increased by 49.15 mkg to 1,114.09 mkg during January–July from 1,064.94 mkg in the same period last year. The decline in the international prices has also influenced the prices in the country, they said.