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crew320


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Tea...Anyone ??
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Tea...anyone ?? Or is it Coffee ?



aM



-- Edited by crew320 at 01:11, 2006-09-23

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karatecatman


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RE: India..Biggest Tea Exporter ?
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Biggest export of ----------- TEA, TEA, TEA. 


A 2002 story but one that gives a good idea of what's wrong. Its been downhill since then.


http://www.blonnet.com/iw/2002/09/01/stories/2002090100621300.htm


Tea: The overflowing cup of woes


Anand Ram



TEA is best had, not written about. Or so the saying goes. But its cup has been so full of woes, that there is hardly any cheer left. A surfeit of supplies and sliding prices have left the tea industry at the bottom of the cup, in dregs. To exacerbate the situation, the industry essentially operates at a commodity level — volume driven and with low margins.


Worldwide, tea production has declined, by about 4 per cent to 652.8 million kg between January and June 2002 against the levels in the same period last year. Global consumption too has shrunk about 3.5 per cent to 529 million kg during this period. This is a worrying trend indeed.


Spiralling costs, low prices



The cost of producing tea in India is high, taking a toll on margins. Since the industry is agrarian, labour is an important component of the cost structure. Prices have languished on the back of demand-supply mismatch. Teas put up for auction in the South have traditionally fetched lower prices than those in the North. But this year the fall has been sharper in the north (down 30.17 per cent in January-May 2002 against the corresponding previous period) while in the south, prices slipped 12.46 per cent.


Curtailing production levels may be one way of lending support to prices. In fact, the truant monsoon is being viewed as a blessing in disguise for the industry. The all-India production in the January-June 2002 period dropped about 4.5 per cent to 285 million kg over the same period last year. However, prices have not perked up in tandem. Rather, the all-India average selling price dropped about 20 per cent (at Rs 51.52 a kg) against the levels in the same period in 2001. Understandable, as there is usually a lag before prices begin to correct. But, in the end, even if prices recover on the back of production cuts, the industry will lose out as the net value of tea produced will fall.


Exports down to a trickle



For a country that prides itself on being the largest producer of tea, it comes as a surprise that exports are much lower than that of other countries. Exports between January-June 2002 were a mere 74 million kg (down 3 per cent over the same period in 2001). Exports by Kenya and Sri Lanka, on the other hand, were much higher at about 120 million kg each. In particular, India has lost share in the British and Russian markets (the latter tumbled over 8 percent in 2001 as quality and prices turned buyers away).


Another problem is that India is a CTC consumption country while the world prefers the orthodox variety. Small plantation growers are more comfortable producing the CTC types, as domestic consumption is certain even if price realisations are lower. Growers are simply not competitive on the export front and Sri Lanka, Kenya, Malawi, and Indonesia are able to beat them in the orthodox segment.


Cannibalisation in beverages



There is also a feeling that soft-drink majors and other beverage companies have drawn away tea-drinkers. The youth, for example, are seen as grabbing a bottle of soda rather than a cup of tea. However, the industry is largely to blame for this. It remained complacent even as colas and sodas took over the market, and even traditional beverages like coffee were promoted into a fashionable drink.


Dogged by problems



* The higher age of tea plants in India vis-à-vis those in the new tea-producing countries has affected the quality and yield.


* The quality of tea produced in India for the export market is lower than those offered by other countries.


* The Darjeeling variety has not been patented and protected enough that markets abroad are often flooded with quantities far exceeding the actual production.


Government support



Realising the gravity of the situation, the Government has begun to be supportive of the tea industry. India is the largest producer of tea (at 854 million kg in 2001) after China. But much of this is consumed domestically (660 million kg in 2001). Only a small proportion is exported (about 180 million kg in 2001). Given the size and the employment potential, the government's moves are not surprising.


To make prices more competitive and to pep up domestic sales, the 2002 Budget cut the excise duty from Rs 2 a kg to Re 1. The industry is expected to gain about Rs 86 crore by this. Further, to guard the home turf from cheaper imports, the import duty was raised from 70 per cent to 100 per cent; imports have come down marginally from last year. Curiously however, the drop has been more in value terms (36 per cent, or Rs 11.4 crore, in January-April 2002 over the same period last year) than in volumes (13 per cent or 5,93,000 kg). This suggests that high-value teas, like orthodox varieties, are being imported less.


The Government also decided to fully open the tea industry to foreign investment. The FDI limit has been raised from 26 per cent to 100 per cent. However, this is hardly any incentive for foreigners to pump money into an ailing industry beset with high costs and low realisations.


The way ahead



The image of tea has to be given a facelift and actively promoted, and the general consensus among the industry is to do it by projecting it as a health drink (polyphenols and other amino acids in tea have cholesterol-reducing and anti-cancer properties). This may lead to higher consumption of tea.



For the established players vending tea at the retail level, the more pressing need is to focus on blending, packaging, and labelling, and branding the tea products both in the domestic and export markets. For, their worry is primarily of smaller manufacturers flooding the market with low-priced packet teas. In particular, bought tea leaf factories are able to do this successfully as they are able to procure the same quality at lower prices in auctions as opposed to companies that grow tea themselves.
Companies such as Tata Tea have tackled this by introducing economy-end umbrella variants like Agni and Agni Sholay that compete with, among other brands, A1, Tiger, Ruby and Girnar Jumbo.



Cost rationalisation is another key area for plantations and integrated companies. Tata Tea has already started on this by offering a separation scheme to its non-plantation employees.


Production cutbacks appear inevitable to stabilise prices though this will mean lower realisations in the short-run. A tilt in favour of orthodox tea rather than CTC may also help pursue exports.


In terms of packaging, too, tea from plantations can be stocked in standardised pallets allowing easier handling and transportation.
All this may come as a soothing cup for tea companies facing difficult times.


In falling markets, as now, companies are bound to lose share to low-cost producers. Integrated companies (that produce and brand tea) are even more at risk.


And, worse, other tea-producing nations like Sri Lanka, Kenya, and Malawi are watering down India's image as a dominant and quality exporter. Not a pretty picture indeed.


 



-- Edited by karatecatman at 17:40, 2006-09-22

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karatecatman


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Same story. 


http://www.indiatogether.org/2003/nov/eco-teawoes.htm


A depressing flavour
Globalization has hit the Indian tea industry's fortunes hard. With brokers and buyers in apparent collusion workers bear the brunt, reports Ranjit Devraj.

November 2003 - This month's burning alive of 21 people in West Bengal by tea garden workers, angered by fresh recruitment, is the surest sign yet that India's once famous tea industry is now in deep distress. Tea garden owners were quick to blame aggressive trade unionism in Communist-ruled West Bengal for the Nov. 6 tragedy. But nearly everyone agrees that the roots lie in the crash in global prices for the beverage leaf, along with other commodities, over the last four years.


India, the world's largest producer of tea with annual production exceeding 850 million kilogrammes, has been hit particularly badly because its traditional markets in the countries that made up the former Soviet Union have been steadily drying up. Tea exports have declined from 99 million kg in the 2001-2002 fiscal year to 71 million in the last fiscal year, representing a 28 percent drop in what is a major export earner for the country.

On top of that, domestic consumption of tea, which accounted for 673 million tonnes in 2001, has increasingly been losing out to the manufacturers of bottled beverages. Transnationals like Coca-Cola and Pepsi have been carving out large chunks of the market ever since they were allowed into the country under India's decade-old liberalization policies.

But close watchers of the tea industry, such as the economist and parliamentarian Biplab Dasgupta, have been trying to draw the central government's attention to large Indian tea cartels such as Tata Tea and Hindustan Lever. These have been accused of manipulating prices at tea auctions so that both planters and workers are hit adversely by low prices. Tata Tea became the world's second largest tea company after it acquired the Tetley Group of Britain two years ago, while the transnational Unilever remains the biggest.

"The planters are not prepared to point fingers at the big corporates and find it easier to make their workers pay for the plunder through lowered wages and poor living conditions," Dasgupta told IPS.. Dasgupta pointed to a report commissioned by the state-run Tea Board, released last year by the international management consultants A.F. Feguson and Co, which had also questioned auction procedures and suggested that there existed a nexus between tea brokers and buyers that worked to depress prices.

Market studies have shown that the phenomenon of falling prices is far worse in India than in competing countries, indicating distortions brought on by manipulations at the auctions. When the price of Indian tea fell by 18.73 percent in 2000, the price of Indonesian tea actually rose by 13.55 percent. Kenyan tea prices rose by 13.48 percent and Sri Lankan tea by 7.86 percent.

Dasgupta said that stipulations that the bulk of tea has to be sold at the auctions, designed to encourage competition and fair prices, now work in favor of the cartels and prevent true market forces from operating. These, he continued, bring ruin to both planters and workers, as well as the whole tea industry. Around the Dalgaon Tea Estate, where last week's massacre took place, more than 30 tea estates are now closed thanks to falling prices and labor problems. Many more are slated to follow suit.





Similar stories of closure are now commonplace in the neighboring tea-growing areas of Darjeeling, famed for its fine teas, and Assam which accounts for half of India's total production. Ranajit Guha, a leader of the All-India Trade Union Congress (AITUC), says that while established tea gardens are closing down, West Bengal has seen a mushrooming of smaller tea gardens that do not see the need to follow prescribed norms. "These gardens have no processing facilities and but sell off their leaves to the larger units and see fit to default on provident fund and other dues so that the condition of their employees is best described as pathetic," Guha said.

There is little good news from southern India where, last year, plantations owners were actually able to negotiate with trade unions to lower wages by 10 percent from the $1.80 U.S. they get for a day's labor. This has been a setback to workers in northern India, where unions have for years been trying to raise the prescribed minimum daily wage of about a dollar to match levels prevalent in south India. Plantation owners across India have succeeded in making unions accept an increase in leaf-plucking quotas by 10 percent and other tasks by 16 percent, citing adverse market conditions and threatening closures.

A study team drawn from several trade unions said the pluckers, most of them women, were being compelled to use mechanical harvesters that were unwieldy and caused their muscles to ache. "These workers told us that the managements advised them to have their uterus removed in order to handle the machines better," said Suneet Chopra, a member of the team. Chopra believes that mechanisation, as opposed to the traditional hand-plucking, was also responsible for the poorer quality of Indian teas. This, in turn, has resulted in the loss of export markets in Russia and Britain to competitors like Sri Lanka, Chopra added.

In south India, employers have locked out or abandoned as many as 14 plantations. "If the tea industry is to survive, it must be freed form the stranglehold of the auctions and workers allowed to form cooperatives that can take over sick and abandoned estates," Chopra said. ⊕

Ranjit Devraj
November 2003



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karatecatman


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http://www.iht.com/articles/2006/09/18/bloomberg/bxtea.php
India faces tea shortage as demand increases

By Thomas Kutty Abraham Bloomberg News

Published: September 19, 2006








MUMBAI, India India, the world's largest producer and consumer of tea, may have a shortage of the commodity for the first time in eight years because of rising domestic demand and an increase in overseas sales, industry officials said.
 The country, which accounts for more than a quarter of global tea output, may end the year with a deficit of as much as 40 million kilograms, or 88 million pounds, said Aditya Khaitan, managing director of McLeod Russel, the biggest Indian tea-grower. That exceeds the 27-million-kilogram shortfall forecast by the Indian Tea Association.
 The shortage may help to extend gains in world prices. African tea prices surged this year because demand rose and a drought reduced output in Kenya, the world's biggest black-tea exporter. Higher tea prices may leave domestic plantation companies, including McLeod Russel, with more money to expand in the nation's $1.4 billion tea market.
 "Tea companies should benefit with reports of a drought in Kenya and a deficit in India," said Dipak Acharya, a fund manager at Bank of Baroda Mutual Fund, based in Mumbai. "Prices should rise because of tight supplies."
 Indian tea production this year may be little changed at 930 million kilograms, according to the Tea Association. Demand may increase 4 percent to 805 million kilograms and exports may reach 195 million kilograms, said Sujit Patra, joint secretary at the association. Imports may rise 25 percent from a year ago, to 20 million kilograms. The industry began the year with a stock of 23 million kilograms from 2005, Patra said.
 India buys tea mainly from Kenya, Indonesia and Vietnam for blending with locally produced leaf.
 "My estimate is that the deficit this year may rise to 40 million kilograms," Khaitan said. "A shortage will be felt from the end of this year, as there are signs that the winter may set in early."
 Indian tea exports, which jumped 28 percent in the April- to-July period, may surpass 200 million kilograms this year as traders increase shipments to gain from higher prices, Khaitan said. India exported 192 million kilograms of tea in 2005. Drought in East Africa cut Kenya's first-half output 19 percent from last year to 134 million kilograms, the Tea Board of Kenya said in July, driving up prices.
 Indian domestic tea prices on average have climbed 10 percent to 63.65 rupees, or $1.38, a kilogram in the first seven months, according to the state- owned Tea Board.
 McLeod Russel in December bought Doom Dooma Tea, a unit of Hindustan Lever, to tap a bigger slice of a market where an estimated 500 billion cups of the beverage are drunk annually. The purchase raised the company's annual output 13 percent to 70 million kilograms.
 McLeod Russel's shares have surged 74 percent this year and those of Jayshree Tea & Industries have climbed by a third, as expansion in the Indian economy stokes consumption of beverages such as tea, instant coffee and colas. The advances have beaten the 29 percent gain in the benchmark Sensitive stock index in the period.
 "Investors are showing interest in tea stocks as demand is rising," said Acharya of Bank of Baroda.
  

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http://in.today.reuters.com/News/newsArticle.aspx?type=businessNews&storyID=2006-09-16T175418Z_01_NOOTR_RTRJONC_0_India-267881-1.xml


India's plantations need major reforms to prosper
Sat Sep 16, 2006 6:00 PM IST 
  
India (Reuters) - India's struggling plantation sector needs wide ranging land and labour reforms if it is to boost production and exports in the years ahead, a top industry official said on Saturday.


"We need to make very substantial and serious structural changes. Laws that were put in place to ensure welfare are doing just the opposite," E.B. Sethna, president of the United Planters' Association of Southern India (UPASI), said.


Land, labour and minimum wage laws must be reformed he told a planters' meeting in the southern hill town of Coonoor.


The industry has been demanding that laws should be changed to allow planters the right to grow alternate crops if they face losses in growing a particular commodity.


Existing regulations do not allow them to diversify crops easily, resulting at times in huge losses, officials said.


Referring to labour issues, they said the sector wanted central and state governments to share high costs incurred in providing workers with social benefits like housing, schooling and medical facilities.


The area under plantation crops, including rubber, tea and coffee, in India is estimated at about 1.55 million hectares. About 1.34 million growers and 2.28 million workers are associated with the plantation industry.


Total value of plantation commodities in 2005/06 is estimated at 141 billion rupees ($3.07 billion), accounting for about 2 percent of India's total agricultural annual production.


But the sector has been facing major challenges in recent years as competition rises, market prices fluctuate, erratic weather and the rising cost of inputs.


Trade officials said heavy rains and pest attacks were likely to dash hopes of a rise in coffee production in the year to March 2007 and peg it at around last year's level.


India's state-run Coffee Board in August estimated output would rise by about 9 percent to 300,000 tonnes in 2006/07, from 274,000 tonnes in the previous year.


India's tea exports in the first quarter of 2006 fell 22 percent to 36.55 million kg, from 47.33 million kg in the same period last year due to bad weather and lower output.


Sethna said the government would have to take some bold initiatives to stabilise the sector in the coming years.


"There is no justification in continuing with obsolete laws and there is an imperative need to modify them."



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The beginnings of a revival


http://www.newindpress.com/NewsItems.asp?ID=IET20060917020643&Topic=0&Title=Southern%20News%20-%20Tamil%20Nadu&Page=T
Giving tea industry a global edge
Sunday September 17 2006 12:28 IST
COONOOR: The Centre will come out with a Special Purpose Tea Fund at an outlay of Rs 4,700 crore on November 1, Union Minister of State for Commerce Jairam Ramsh has said.


Announcing this at the 113th annual conference of the United Planters Association of Southern India here on Saturday, he said that this would address the replanting needs of the industry and usher in a milestone in making the industry globally competitive.


A similar attempt was being made for pepper with the support of the National Horticulture Mission where the Kerala Government would implement it in Idukki district, while the Spices Board in Wyanad, the Minister said.


For rubber, it had been identified that 50,000 acres of land needed replanting, while for coffee 19,000 hectares.


He said that research and technology suffered a lot because of the scientists leaving the labs in search of better pastures and hence, it had been decided to upgrade the research labs of commodity boards to the level of ICAR or CSIR to attract and retain the best talents in the field.


Pointing out that the new entrants to the global market posed severe competitions to the Indian plantation produces, he said that fresh initiatives would have to be launched. That is why he launched the new coffee mascot Coffee Swamy in Bangalore this week which would be used in international coffee conventions to promote Indian coffee.


On tea, the focus would be on exports to Egypt, Iran and Pakistan. While attempts had already been made to open the markets in Iran and Egypt, fresh attempts would be made to export tea to Pakistan.


The Minister assured that once secretary-level talks resumed between the two countries, tea would get priority in trade with Pakistan.


There is a need to encourage trade through the Wagah Border, he said. The Minister, however, urged the industry to step up its marketing initiatives.


“We will give you the money and infrastructure, but you should prove your marketing efficiency. I want to discourage the sponsoring of delegations which go more for sight-seeing than marketing,” he told the planters.


On price stabilisation fund, he said that the present system was a failure. So, a committee has been formed to study the issue and incorporate the insurance component. “I hope this will be announced in the next Union Budget,” he said.


Referring to the sharing of the social cost, he said that he had already started discussions with the Chief Ministers of the States where plantation crops are grown. But, this calls for an amendment to the Plantations Labour Act, 1952, and that has to come through the Parliament.



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HAWK21M


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Wheres this pic taken from.


regds


MEL



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the_380


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Are u sure its tea or coffee?



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crew320


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Hmmm, I guess the subject got some of our members confused and it all got off topic...


It was a joke people !! (but good to know about Tea and India )


aM



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crew320


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HAWK21M wrote:


Wheres this pic taken from.


regds


MEL




This picture was taken a little while ago in my home in Delhi when there was some work going on in our locality on the underground water system. They dug up a few holes to increase the water supply to the colony and this is what we got for a week to follow.


Imagine brushing your teeth in the morning with this


We, however, bath, brushed and cooked with Aquafina for some time...


(Apologise for the misleading topic)


aM



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HAWK21M


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Bad Water.


Interesting Pic though.


regds


MEL



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