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Upasi
weighs options to market tea via producers’ consortium
Ajit
Kumar V
Coimbatore, Nov 4: The United Planters’ Association
of Southern India (Upasi) is commissioning a study to look
into the prospects of tea marketing through a consortium of
tea producers.
Talking to The Financial Express, Upasi president
IJJ Rebello said the premier body representing the organised
plantation sector in south India proposes to set up a consortium
of producers to enter tea marketing directly. As a prelude
to this Upasi plans to rope in an independent consultant to
study the potential for direct marketing, tapping either the
wholesale or the retail segment. The study would also suggest
the funds requirement for such an exercise.
Ever since the Centre amended the Tea Marketing
Control Order, 1984, the tea industry has been looking at
ways to channelise the produce through a more remunerative
system other than the customary auctions. The Order, which
earlier made sale through auction system compulsory (subject
to certain exemptions), was amended giving tea producers full
freedom and option to sell their produce through auction centres
or any other mode of their choice.
However, even after nearly nine months since the amendment
of the Order, an alternate system is yet to evolve. Majority
of the producers still route their produce through the auction
system.
‘‘We have decided to get together and pool our resources since
the producers are always at the receiving end. There is a
wide gap between auction prices and those at the retail end.
No market research has been done previously. We need to see
whether the consortium efforts are feasible,’’ Mr Rebello
said. Though average auction prices of tea have recovered
marginally to Rs 47.42 a kg so far this year compared to the
last year’s low average of Rs 44.63 a kg, it still hovers
at much lower than the industry-claimed average cost of production
of Rs 65 a kg. Moreover, the auction prices fail to show any
relation to the wholesale or retail prices. The wholesale
price is claimed to be around Rs 100 a kg and at the retail
end packed teas are sold at upwards of Rs 130 a kg.
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