The Mumbai Tea Traders Association has decided to hike retail prices of loose tea by Rs 10 a kg.
Harendra Shah, honorary secretary of the association, said the raise was inevitable because of the slump in global tea production, increased export of tea and the constantly rising prices at auctions.
He said prices at tea auctions have registered an approximately 30 to 40 per cent hike. Currently, the lowest quality tea is quoted at Rs 85/90 a kg while fine quality tea is quoted anywhere between Rs 115/125 a kg at the auction centres.
More From This Section
Besides, other expenses like taxes, octroi, transportation, packaging and forwarding charges add nearly Rs 40 a kg to the total cost.
There are six tea auction centres in the country i.e., Calcutta, Siliguri, Guwahati, Kochi, Coimbatore and Coonoor.
At the retail level, prices of packed tea have already witnessed a rise. Girnar Royal Cup is sold at Rs 160 a kg, Brook Bond Taj at Rs 156, and Society at Rs 148 a kg. In the medium quality Girnar Super Cup is priced at Rs 132 per kg, Red Label at Rs 136, Lipton Tazza Rs 136 and Tata Tea at Rs 136 a kg respectively. In India, tea production is estimated at about 80 crore kg for the 1996-97 season. Tea exports is likely to be about 19 crore kg this tear against 16.5 crore kg the previous year.
The main buyers of Indian tea are Russia, the CIS countries and Poland among others. To arrest the spiralling tea prices, Shah suggested that export of bulk CTC tea should be banned, a national buffer stock should be built up and there should be separate auctions for domestic and export purpose.
He also recommended abolition of a central sales tax, reduction in sales tax from eight per cent to four per cent and uniformity in octroi duty.