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Black tea soars 6% as estates stop plucking

Kolkata: The Tea Board India’s directive that tea estates stop plucking of tea leaves from mid-December to February-end has prompted packet tea buyers to buy more teas at the auctions, with the result that prices of black teas that are commonly used for tea bags increased nearly 6 per cent yearon-year in November. “Till October, prices had not gone up much. But with the Tea Board coming out with the directive of early closure of tea estates, prices have revived. The dust variety which is used in tea bags is fetching good prices. All the big packet tea players such as Tata Global Beverages, Hindustan Unilever and Wagh Bakri are actively buying at the auctions,” said a senior tea trader, who did not wish to be identified.

The Tea Board took the initiative of mandating early closure of tea estates to prevent production of low quality teas that dampen prices of all kinds of teas.

The packet tea market size is estimated to be around Rs 10,000 crore and tea bags form an integral part of this market. Industry executives said that the demand for packet tea is on the rise as it is be- ing preferred by nearly 80 per cent of urban and around 75 per cent of rural households.

Price recovery of teas in the first ten months of 2019 was not encouraging given that the cost of production has gone up many times. Tea Board data shows that the average price at the auctions went up 3.45 per cent year-on-year to Rs 141.57 per kg in the first ten months of 2019. The increase in average price occurred due to higher orthodox tea prices.

Source: Economic Times