Tea prices come down by Rs 6 in Siliguri - Global financial crisis hits brew sector

Siliguri, Nov. 4: Tea prices have plummeted in north Bengal after they reached close to Rs 100 a kg. There has been a sharp fall of Rs 6-7 per kg at the auctions held here at the end of last month and according to the stakeholders, the global financial meltdown is to blame for the crash.

After nearly one decade of slump when the price had come down to as low as Rs 54 per kg in the region, the commodity had been fetching a higher amount since the beginning of this year. The rise in the price had been a major relief for the brew belt.

“Since March 2008, the sector had been doing well. The prices started rising after many years and we were feeling a bit relieved that the financial distress faced by those associated with the sector would somehow be eased,” said Prabir Bhattacharjee, the secretary of the Dooars branch of Indian Tea Association.

“However, the sharp fall we have witnessed in the past couple of auctions held in Siliguri and at other centres in Calcutta and Guwahati have left us contemplative,” he said.

Bhattacharjee added that the present global recession had led to a liquidity crisis, thereby affecting tea sales across India. “As the demand came down, the prices started nose-diving and I don’t see any other reason for the fall.”

According to the statistics available with the Tea Board of India, the average price at the auctions held from January to September this year in Calcutta was Rs 101 against Rs 82.36 during the corresponding period in 2007. In Guwahati, the brew was sold at Rs 88.86 in the same period this year. In 2007, the price was Rs 68.06.

At Siliguri auction centre, the figures were Rs 64.92 for 2007 and Rs 82.95 this year. The average price of tea reached Rs 92.07 from Rs 72.63 last year in north India. In south India, the average price during January-September this year was Rs 63.56, higher than Rs 50.34 in 2007. The-all India average auction price also crossed the Rs 80-mark. It was Rs 82.76 this year, an increase of Rs 16 from Rs 66.53 in 2007.

“Everything was fine till mid-October, but following the depression experienced by the global economy, importers could not supply more tea in international markets. This brought down the prices,” said K.K. Mintri, a planter of north Bengal. “It is not only CTC tea but the Darjeeling variety has also suffered a setback to some extent. As far as I understand, other tea producing countries like Kenya and Sri Lanka, which bank mainly on exports, are also facing the similar situation.”

Mintri said if the prices continued to come down, it would become tough for planters to meet expenditures like workers’ wages which had been revised recently.