Reading tea leaves is one of the arcane techniques that astrologers use to determine the fate of people. Henceforth, they may have to devise alternative modes of fortune telling as tea leaves are no more available cheap for reading. | |
| Tea prices have been northward bound since the past four months but the increase has been rather sharp in the last one month. |
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| Prices of orthodox tea have moved up 47 per cent to Rs 125 per kg from Rs 85 per kg, while that of common tea have risen 30 per cent to Rs 70 per kg from Rs 55 per kg in the one-month period. |
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| Analysts say shortage of supply and an increase in production expenses contributed to the rise in prices. For one, drought-like conditions prevailed in South India before the monsoon did an about-turn in the last week of July. |
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| Secondly, major tea producing areas in North India like the Kachar, Assam and the Darjeeling belt witnessed flood and hailstorms. |
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| But analysts welcome the fall in production as it would will help the industry get rid of surplus stocks accumulated over the years due to over-production. |
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| However, the rise in tea prices is likely to improve realisations of plantation owners who have been battered by the high cost of production, especially in South India. |
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| High labour cost (labour cost constitutes around 60 per cent of the cost of production) and agricultural taxes have also resulted in a much lower retention of profits. |
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| In a sense, the sector could be termed as the last bastion of socialism, given that laws prevailing in most states require plantation owners to provide facilities like ration and schooling for children of workers. |
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| The higher wages paid to workers in Indian also contributed to the rise in prices. However, the main contributor was the steep fall in auction prices. |
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| As a result, for many companies, prices were not even covering production costs. This forced many plantations, especially in South India, to shut shop. |
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| The June-quarter results of major tea players reflected the change in prices which started rising from March onwards. |
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