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Indian tea faces tough fight overseas from African variety

Indian tea faces tough fight overseas from African variety

The Tea Board is working on a plan to boost tea prices through modification of the auction system,” he said. Kolkata: Indian tea is facing a tough competition from African teas in the UK , European Union and Pakistan as prices of the beverage crop grown in that continent have declined significantly. Kenya tea prices have fallen 22 per cent in a year and the Uganda crop is cheaper by 36 per cent. Oversupply has caused the prices of African teas to fall to five-year lows. “This is impacting Indian tea exports as we cannot offer teas at prices lower than the Africa crop,” said Vivek Goenka, chairman, Indian Tea Association . “Our cost of production is high and if we try to export teas at a lower price, we will face losses.” Export of Indian teas in the first six months to the UK has dropped 35.43 per cent and 31.16 per cent to Pakistan. In EU , the drop is to the tune of 5 per cent. The industry is also worried about low CTC tea prices . CTC is the most common black tea sold locally. “Prices are not picking up for CTC teas. The Tea Board is working on a plan to boost tea prices through modification of the auction system,” he said. The Tea Board is working on a plan to modify the auction mechanism to help boost tea prices, enable sellers to reach out to a larger buyer base, and improve the quality of tea. The board is acting on the recommendations of IIM Bangalore, which was appointed by it to come up with suggestions to improve local tea pricing. It has recommended introduction of Japanese auction mechanism in tea, which is equivalent to ascending auction. Other recommendations are robust quality certification through a neutral party, re-designing of catalogue with no indication of valuation, standardisation of lot sizes, and elimination of divisibility of lots.

Indian tea faces tough fight overseas from African variety

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