Tea stocks hot on Dalal Street

Kolkata: Cuppa is once again hot on Dalal Street. The tea stocks have quietly moved up between 20 and 35 per cent in the past one month as improvement in domestic tea prices became visible.

The exports market, particularly of Northern Indian varieties (Assam, Dooars and Darjeeling), has also been showing signs of mark-up.

According to Mr Kamal Baheti, Director of McLeod Russel, world’s biggest tea producer, the quarter to December 31, 2007, should prove to be the best in recent years.

“This quarter has seen a price rise of Rs 10 a kg against Rs 7 in the third quarter of 2006,” he added. The exports are also fetching better value smothering the losses on account of the rupee appreciation against the dollar.

There is substantial shortfall in the availability of tea for domestic consumption, estimated to be growing annually by around 3 per cent. “The local shortfall in output, according rough estimates, could be in the region of 20 million kg at the end of the calendar year, while the demand growth suggests an expansion of about 20 to 25 million kg,” he said.

Industry experts said that the year-end carryover stock is lower than usual and this is now being reflected in the auction price trend too.

“Internationally, Sri Lanka’s production is estimated to be lower by around 20 million kg. Though Kenya’s production is stated to be normal, there is an overall demand-supply mismatch at the international level. This has already placed an upward bias in the prices,” Mr Baheti said.

Industry insiders and analysts seemed to think that the commodity cycle for tea might have seen the worst go by and the one-year outlook appears to be good. According to Mr Rajesh Agarwal, Director research of CD Equisearch, the realisations for tea companies are going up.

On the domestic front, he felt that the present trend might continue in the next few quarters. However, regarding export realisations, he was not very optimistic as he felt Kenyan supplies could become a spoilsport for an Indian tea party.

McLeod Russel on Thursday closed at Rs 86.25, up around a per cent. The stock has one more trigger in the new jatropha cultivation venture. However, Warren Tea was the biggest gainer, up over 7 per cent, followed by Dhunseri (5 per cent), Assam Co (5 per cent) and Jay Shree Tea (1.29 per cent).

Darjeeling Makaibari Tea at Ambuja Realty luxury resort

Calcutta: Hospitality major Ambuja Realty has joined hands with Makaibari, the oldest tea estate in the world, to set up a luxury resort in Darjeeling.

Tea gardens in Darjeeling usually have their own tourism ventures — modest initiatives with four to five rooms inside bungalows.

“We have finally decided on our partner for tea tourism. We could not have found a better partner than Makaibari, which is globally renowned for its tea. Now we will decide on the scale of the project and the investments involved along with the nature of the partnership,” said Harsh Neotia, chairman of Ambuja Realty.

The resort could get the Radisson tag depending on the outcome of the agreement between Carlson Hotels Worldwide, which owns the brand, and Ambuja Realty. The pact will be reviewed next month.

The project comes at a time when the Bengal government is finding it hard to get partners to promote tea tourism in state-owned estates, such as Hilla and Mahua. Both the estates belong to the West Bengal Tea Development Corporation.

To develop an integrated tea tourism circuit in Bengal, the Union tourism ministry had initially granted Rs 7.6 crore. It was, however, slashed to Rs 3.89 crore.

The Ambuja Realty project will showcase the history of Makaibari, which goes way back to 1859, and focus on tea-related activities such as factory visits, tea facial and spa, tea cuisine, tea tasting and plucking. It will also have a tea museum and crafts centre.

Around 60 per cent of an estate is used for cultivation. Ambuja Realty will acquire 24 acres, allowed under the state law for the utilisation of land in gardens.

As a part of budget tourism, Makaibari now lets out refurbished worker cottages to visitors.

Of the 86 gardens in Darjeeling spread over 19,000 hectares, Glenbury, Gleburn, Tata Tea and Ambootia have started their tourism ventures.

McLeod Russel India Limited has also developed a sprawling tea heritage property at its Adabari estate in the Balipara division of Assam. The Goodricke group has some facilities on a smaller scale at some of its estates.

Previously, foreign tourists made up around 80 per cent of tea tourism traffic. Now the ratio of foreign to domestic tourists has become 60:40.

However, tea tourism is still niche activity, with cottage tariffs ranging between Rs 5,000 and Rs 35,000 per day. There are additional charges for nature activities such as rafting, camping and walks.

Source: The Telegraph

Tea price surge fuels hope of turn around

Siliguri: Frantic end-of-season sales have taken tea prices to a new high in north Bengal, making this year the best since the industry went into recession about six years ago.

“It’s boom time with tea prices going up significantly,” said S.K. Saria, the chairman of Siliguri Tea Auction Centre (Stac). “Although the benchmark set by the golden period of the 90s is still far away (see chart), this year’s is a remarkable gain compared to that of last year, which itself was better than the preceding year. The industry seems to have made a U-turn and if the trend carries on for the next few years, the tea sector will be able to regain its lost glory.”

The average price during Sale 50 held on December 20 was Rs 74.98 per kg, while that of Sale 49 held on December 13 was Rs 73.24, according to auction sources.

“The average price of Sale 50 last year was Rs 62.50,” said Ravi Agarwal, a former chairman of Stac and a member of Siliguri Tea Traders Association. “That is a gain of more than Rs 12.”

According to the latest figures, the average auction price this year — up to December 20 — is Rs 67.44 per kg. The corresponding figure in 2006 was Rs 66.60 and in 2005 Rs 59.29.

“This year’s average price is the best ever since the recession set in,” said P.K. Bhattacharya, the secretary of the Dooars Branch of Indian Tea Association. “This end-of-season fillip will help keep the prices high until the middle of next year at least.”

Industry watchers said the price boom was driven by a combination of several factors.

“There was no tea in the pipeline,” Bhattacharya said. “In addition, there was a drop in the overall crop production by about 20 million kg. The shortfall in supply had an obvious effect on prices.”

The trend was also affected because several CTC manufacturers took to making orthodox teas, Agarwal said. “This year, more than 20 million kg tea was converted into the orthodox variety, which always fetches good prices. The shortfall in CTC helped boost its prices,” added Agarwal.

“Major buyers like Unilever who were silent for most part of the year, were at their active best as the end approached,” Saria said. “The competition from major buyers firmed up the prices further.”

However, all stakeholders of the industry agreed that it would be a challenge to sustain the trend.

“To take the industry forward, we have to ensure that we do not compromise on the quality of tea in our bid to sustain the boom,” Saria said.

“Often there is a tendency to compromise on quality to increase production and meet the increasing demands. If we give in to market pressure in this way, we will get sucked up into recession again,” the Stac chairman added.

Source: The Telegraph

Exemptions for frozen account

Jaigaon, Dec. 24: The regional provident fund office in Jalpaiguri has allowed the management of Dalsinghpara Tea Estate to deposit the education stipend sent by the Tea Board and the salary savings of workers under an LIC scheme in its account, which has otherwise been attached.

The account was sealed after the garden management defaulted on provident fund dues of nearly Rs 76 lakh.

The regional provident fund commissioner II, Jalpaiguri, Gautam, said the account of the garden in the United Bank of India’s Birpara branch, was attached in August. It was done after the management failed to respond to several pleas to deposit the amount deducted from the workers’ salaries as provident fund.

“The garden management had given several undertaking before the high court that it would pay up the dues, which stood at Rs 75.26 lakh till March 2007, in instalments but failed to keep its word,” Gautam said.

Kalatush Kullu, the unit president of the National Union of Plantation Workers, an Intuc affiliate, said because of the frozen account many schoolchildren had been deprived of the Tea Board stipend. “As it is we don’t get our salaries and ration on time. Now even schoolchildren are not getting their stipends. Last September, a draft of Rs 40,013 was sent by the board in the name of the garden manager. This was meant for distribution among nine students. The money is yet to be disbursed,” Kullu said.

A woman worker of the garden, Kabita Rana, said her son, Abhisek, who studies in Class XI at B.D. Memorial School in Jaigaon, was to have received Rs 7,334 as education stipend for one year.

Gautam said the representatives of several unions like the Intuc, Citu and the UTUC had appealed to him to exempt the education stipend and the salary savings scheme. “We found out that these two items had no bearing with the management and so gave them permission to use the account for these two purposes,” the regional commissioner said.

Sources in the garden said that the management was now operating through the account of the Dalmore Tea Estate, which is owned by the same Octavious Group. Their account, too, is in the same bank.

Source: The Telegraph

More tea benefits to small tea growers

New Delhi: Small tea growers in the country may soon get benefits enjoyed by medium and large tea garden owners .

Sources told Business Line that the Government and the Tea Board have already put in place a slew of measures to help the small tea growers with less than 25 acres. These include, among others, subsidy and grant in aid for their various developmental activities such as new planting, replanting, rejuvenation, pruning and infilling the vacancies, creation of irrigation facility, and organising them into self-help groups (SHGs).

Sources said Rs 53.36 crore has been disbursed under the ongoing schemes which is inclusive of Rs 20.85 crore disbursed as price subsidy. Though the aggregate production from small growers accounts for only 20 per cent of the total production, the financial assistance extended by the Tea Board during the last three years (2004-05 to 2006-07) of the 10th Plan works out to 27 per cent of the total assistance given to the tea industry, estimated at Rs 198.60 crore.
Price sharing

Sources said that the implementation of a price sharing formula with effect from April 1, 2004 was primarily to ensure that the small tea growers get a fair share of the price .

While calculating the actual price for the green leaf, the outturn percentage is also taken into account. The outturn percentages applicable to Tamil Nadu is 23 per cent, Himachal Pradesh and Uttaranchal it is 26.40 per cent and for the rest of India it is 21.50 per cent.

Sources said that in some parts of the country particularly in North Bengal and South India, the bought leaf factories have not been adhering to the directives issued by the Board. All such factories in North Bengal have been identified and notices have been served on them with a warning that stern action would be taken if they fail to follow the directives.
CISTA launched

the Minister of State for Commerce, Mr Jairam Ramesh, said that he has launched the Confederation of Indian Small Tea Grower Association (CISTA) in Elappara in Kerala on December 15. Mr Ramesh said that he saw them as a great social force since they signify first-generation local entrepreneurship in the industry.

He said small growers accounted for 25 per cent of the country’s tea production with 39 per cent in Assam, 34 per cent in Tamil Nadu, 24 per cent in North Bengal and 10 per cent in Kerala. Mr Ramesh said the Department was engaged in ensuring how “we can give CISTA representation on the Tea Board”.

He said that he has written to State Chief Ministers about giving the small growers pattas or some sort of possession certificates so that they could avail of the schemes and loans . Only 10 per cent of them are registered with the Tea Board. He said the Board will fund a complete census of small tea growers which could be undertaken by the State Governments.

Source: Business Line

Stir for wage hike by tea workers soon

The CPI-ML general secretary and working president of the All West Bengal Tea Garden Labour Union, Mr Kanu Sanyal has alleged that the management of the Pahargumia Tea Estate was conspiring to lockout the plantation. “The winter season is a lean period for the tea industry. Taking advantage of the situation, the Pahargumia management is planning to lockout the plantation under any pretext,” Mr Sanyal alleged.

According to him, despite a peaceful situation in the plantation, the workers’ union affiliated to the AWBTGLU is being held responsible for an imaginary trouble in the estate, so to workout an excuse for the lockout. “The workers’ unions affiliated to the CPI-M and Congress are working hand-in-glove with the estate management in this conspiracy,” Mr Sanyal alleged.

Making it clear that the AWBTGLU was determined to foil the conspiracy, the Naxalite leader said, they would soon serve the Pahargumia management a memorandum on the issue.

On the other hand, demanding a wage hike for the workers, the AWBTGLU has resolved to launch a 10-day long agitation in Siliguri beginning next week. The agitation, to be carried out by workers of tea estates here, would be held at the Siliguri SDO office premise.

“In 2000, the Minimum Wages Act 1948 was shelved under the consideration that it would be increased in every three years. The arrangement was violated and instead of the scheduled hike in 2003, the same was materialised in 2005.” “Going by that, another wage hike is scheduled by April 2008, but no activities either on the part of the plantations management or the government, are visible till now,” Mr Sanyal alleged.

“The AWBTGLU would also resort to rail and road blockades and the movement would continue till wages are raised,” Mr Sanyal warned.

Source: The Statesman

All that is sold is not Darjeeling Tea

Did you ever bother to spare a thought for your bed tea? If not, it’s time you check out the brand of tea you consume every day. And, if you find it to be ‘Darjeeling Tea’ be cautious. Chances of it being a mix of a small quantity of ‘Darjeeling Tea’ and blends made from inferior tea from other regions are very high.

In fact, four times more tea than was actually being grown in the region was being sold as ‘Darjeeling’ in blends bulked out with inferior tea from other regions, causing a major dip in consumer confidence.

Fears of ‘Darjeeling Tea’ losing its charm have been growing for quite sometime now. Another factor added to the worries of ‘Darjeeling Tea’ producers was the plantations’ heavy dependence on fertilisers and pesticides that were being hawked by foreign corporations.

In the recent days, there is a wind of optimism blowing through the Darjeeling hills, and a growing sense that Darjeeling Tea is on its way to reclaiming its legendary status.

The first obvious step in the right direction was to protect the Darjeeling name. The Darjeeling Planters’ Association and the Central government have negotiated a geographical-origin trademark, approved by the World Trade Organization (WTO). Now any tea that calls itself ‘Darjeeling’ must be 100 per cent from the region.

In another move, several of the top-rated tea gardens — Selimbong, Seeyok, Samabeong, Singell, Makaibari and Ambootia — have converted to organic production.

Self-interest may be influencing the newer organic recruits. A surge in consumer concern about chemicals in food and drink has caused Darjeeling’s best customers — Japan, Germany, the UK and, increasingly, France and the US — to impose stricter pesticide-residue limits.

In Germany, where there is a profusion of specialist teashops, certain chains now have in-house laboratories to test for residues. Some packers of conventionally grown Darjeeling have had to blend it with organic tea to bring down the residues to an acceptable level. Whatever the motivation, organic tea is really taking off.

Even the labour force welcomed the move. They said before, chemicals were hampering their health. It was like poison. They used to fall sick quite often with coughs, headaches and chest pains. The chemicals were so strong and they didn't have masks. Now they can breathe fresh air again.

In all the organic gardens that are owned by Tea Promoters India, the once-serried tea bushes have now been inter planted with trees like wild cherry and plants such as lemon grass and sunflower that feed the soil with nitrogen and also stabilize it so it cannot be washed away during monsoons.

Chemical fertilizers have been replaced by natural worm composts, manures and bio-dynamic preparations made from plants such as yarrow and nettle, with impressive results. When there is any sign of the dreaded tea mosquito, the patch affected is sprayed with a natural insecticide, which is derived from the neem tree.

Darjeeling is one of the few remaining tea-growing regions in the world that still remains faithful to the higher-cost ‘orthodox’ tea production method which begins with the labor-intensive, hand-plucked 'two leaves and a bud' of new growth. It takes a painstaking 20,000 individually plucked shoots to produce just one kilo of tea.

It’s mind-boggling how, when gently withered, rolled, oxidized and dried under the vigilant eye of an experienced tea maker, the same bushes can produce such a diverse sequence of teas. It starts with the fresh, slightly astringent first flushes from the most succulent new spring leaves with their floral scents that tickle the German palate.

Then come the second flushes, munched by summer greenfly, which gives them the characteristic 'muscatel' scent unique to Darjeeling, which so excites Japanese buyers. Quality dips with monsoon teas, which are too damp to produce great results, but returns in the form of the stronger, smokier autumnal teas.

Within these seasonal categories there are further variations; pure, refined ‘China’ teas made from the original bushes imported from China 150 years ago, more vigorous ‘clonal’ teas bred for specific growing situations from the best-performing bushes, and semi-fermented Oolongs, still made in the time-honored way where the leaves are sun-dried and turned every 45 minutes.

These teas from top Darjeeling estates have always found a market among connoisseurs. But now the organic Fairtrade tea revolution is spreading like wildfire among independent farmers, previously marginalized by the traditional plantation system.

Whether it's the family farmer or a big tea estate, the new wave of organic and Fairtrade tea production sweeping through the region is breathing a new life into Darjeeling. But as one of the few regions in the world still producing labor-intensive, classic tea, Darjeeling will always be vulnerable to cheaper, commercial teas from countries where production costs are lower. Unless, that is, consumers are able to appreciate the difference in quality.

Tea was originally introduced to Darjeeling region in 1841 by a Scottish surgeon, Dr Campbell. The British grew tea more as a supply for the army than as a commercial crop, producing it in a traditional way, without chemicals. After India became independent in 1947, they sold up to wealthy Indians, imbued with Prime Minister Jawaharlal Nehru’s policy of rapid industrialization.

The push was on to make the tea gardens as ‘productive’ as possible. The new owners dismantled the carefully constructed terraces that had stabilized the soil, cut down trees to pack in more tea bushes, and turned with great enthusiasm to the miraculous new generation of chemical fertilisers and pesticides that were being hawked by foreign corporations.

This break from natural tea production proved disastrous and the effects started taking a heavy toll on the industry in the recent past.

Alarmed over this, the planters are now desperately trying to revive the old methods of tea production once again. Hope they succeed in their mission.

Source: Commodity online

Darjeeling Tea to be the first Indian commodity in the EU registry

GUWAHATI: Darjeeling tea is all set to be the first Indian commodity to be included in the EU registry for geographical indications (GI) — a move that will prevent tea originating from any other place from being sold under the name Darjeeling in the EU market.

India applied for inclusion of the product in the EU’s GI registry last week after completion of all formalities, including putting in place a domestic certification system and building a unified supply chain system for all gardens in Darjeeling. It may take up to two years for Darjeeling tea to be granted GI status by the EU.

GI is an indication that identifies a good as originating from a particular place and its reputation gets associated with the place. Once a country recognizes a particular product as a GI, its name cannot be used by the producers of the same product located at a different place. The EU GI registry offers protection to over 5,000 European products for exclusive use of their names.

Speaking to ET, Tea Board chairman Basudeb Banerjee said the application for a GI in EU was a step in the right direction and could prevent the misuse of the name Darjeeling tea. Tea Board has fought more than 15 cases against infringement and misuse of the Darjeeling name in the last few years including from Sri Lanka, the US and France.

Tea Board was successful in seeking rejection of trademark application for Darjeeling Nouveau by US company Republic of Tea (ROT). The Trademark Trial & Appeal Board of the US ruled that ROT had not been able to prove that consumers view Darjeeling tea as a generic type, as opposed to tea from the Darjeeling region in India.

Another important victory for Tea Board was against French company Dusong’s adoption of the Darjeeling mark with a kettle device. The court of appeal of Paris, on November 22, 2006, ruled that Dusong’s mark impaired the GI Darjeeling and is prejudicial to the Tea Board’s interest.

Steps would soon be taken to get Kangra tea, a registered GI in India, to get an EU registry.

Modernization of tea business by tea board

The tea board is out to modernize the entire process of conducting brew business in the Dooars. Introducing e-auction is a step towards it.

“While we begin with the electronic auction of tea, we plan to carry out an overhaul of the entire system (of conducting business),” said Roshni Sen, the deputy chairman of the Tea Board here today. “It would make no sense in having a high-tech auction system if, for example, the warehouses are not state of the art.”

Accompanied by H.N. Dwibedi, consultant to the tea board, Sen was here with a three-member team from NSCiT, the information-technology arm and a fully-owned subsidiary of the National Stock Exchange. The NSCiT has been engaged by the board to prepare the software and create the infrastructure needed for the new system.

“We are here to take the opinion of all the stakeholders of the industry so that we are able to design a modernization plan to suit the needs of each of them,” Sen said.

This is the board’s second attempt at electronic bidding. Two years ago, it had introduced e-bidding in a phase-wise manner but the initiative was scrapped altogether after the software developed by then consultant proved faulty.

“Our earlier experience threw up a lot of problems, issues and defects,” Sen said. “We would want to use the experience to our advantage this time.”

Dwibedi said the initiative will be much more than just electronic-bidding. “Not just bidding, the new system will integrate the pre-auction, auction and post-auction processes,” he added.

In the e-auction system, it will not be mandatory for a buyer to be physically present at the auction center. He will be able to participate in the auction process through a unique user ID via a computer. “Registered members of a particular center will also be able to keep a tab on the trends of other centers though they may not be able to participate initially,” Dwibedi said.

NSCiT will be preparing a business requirement specification in the next 270 days.

“Once the system is developed, we will introduce it as a pilot project at the Calcutta auction center,” Dwibedi said. “Then we will introduce it in five other centers, including Siliguri.”

However, the board has no immediate plans for introducing electronic-bidding at the North Bengal Tea Auction Center in Jalpaiguri.

Source: The Telegraph

Tea Gardens on auction

The Bengal government is set to offer two closed tea gardens — Ramjhora and Kanthalguri — in the Dooars to prospective entrepreneurs through auction. However, one of the conditions of the take-over is the settling of all dues.

The state land and land reforms department, which had cancelled the leases of both the gardens after their closure, has asked the Jalpaiguri district administration to arrange for open bidding within this month.

“We have been told to advertise in newspapers,” N.G. Hira, the additional district magistrate (general) of Jalpaiguri, said today. “Auction of the gardens will most probably take place on the third week of this month.”

Jairam Ramesh, the junior commerce minister at the Centre, during his visit to north Bengal in October, had said the responsibility of reopening Ramjhora and Kanthalguri rested with the state government. “Of the 13 closed estates, we will decide the fate of 11, either by persuading the old owners to reopen the estates or by acquiring them under Section 16 (D) or (E) of the Tea Act, 1953. The state is responsible for the remaining two, as it has cancelled the land lease.”

The state government has set some riders for the bidders. “Instead of fixing a floor price, we have set a precondition: any bidder interested in acquiring any or both the gardens has to bear the liabilities accrued with banks, provident fund (PF) department, workers and other stakeholders,” Hira said.

The previous management of Ramjhora Tea Estate — closed since August 2002 — has Rs 5.50 crore due with the banks, Rs 59.43 lakh with the tea board and Rs 58.12 lakh with the PF office. The total dues of the workers is Rs 1.64 crore. In Kanthalguri — closed since July 2002 — the workers do not have any dues. However, the earlier management has Rs 2.48 crore pending with the bank and Rs 11.65 lakh with the Tea Board. The figures are available with the Tea Board and district labour office.

“The bidder who gets the garden(s) will have to enter into an agreement with the government, mentioning details like when and how the liabilities would be cleared,” said Hira.

Source: The Telegraph