Premium tea prices soar

KOLKATA: Get ready to pay more for your cuppa if you are a connoisseur of premium tea. The prices of high-end varieties are set to go up by Rs 15-20 per kg at the retail end as the supply of quality ‘first flush’ Assam tea has gone down significantly due to heavy rains and a pest attack.

Some packeteers like Dhunseri Tea and Girnar have decided to step up packet tea prices by 7-10% while others like Goodricke Group and Jay Shree Tea & Industries are in a ‘wait and watch’ mode.

Talking to ET, Mr Harendra Shah, chairman of the Federation of All India Tea Traders Association, said: “Premium tea prices have gone up substantially at the auctions. Therefore, we feel that quality tea price would shot up to Rs 300 per kg from Rs 280 per kg. Therefore, at the retail end consumers too will have to pay more.” Mr Shah is also the director of Girnar Food & Beverages.

Incidentally, the tea industry has lost about 6 million kg in June and most of the estates in Assam have lost 25-40% crop in the first week of July due to erratic weather and pest attack.

Mr CK Dhanuka, chairman of Dhunseri Tea, said: “We will have to hike prices of our packet teas by 7-10% shortly as auction prices have gone up.” Dhunseri Tea sells packet tea primarily in Rajasthan. It markets its tea under the brand names Lal Ghora, Kala Ghora and Chhote Lal.

The tea industry watchers say everyone is waiting for the major packeteers such as Tata Tea and Hindustan Unilever to take a call on revising packet tea prices. “Once these two packeteers hike prices, others will accordingly take steps,” said a tea industry veteran.

Goodricke Group, on the other hand, is looking at blending medium and “upper medium” types of teas with premium teas to keep the cost under control. “If we suddenly increase price of packet teas, then our sales may take a hit. We don’t want to do that,” said Mr AN Singh, MD & CEO of Goodricke Group.

Jay Shree Tea & Industries has decided to wait for the time being. “If the second flush tea production is affected, we may have to think about a price rise. But as of now we are watching how the market behaves,” said Mr DP Maheshwari, MD of Jay Shree Tea & Industries.

And the heavy rains are interrupting efforts at controlling the pest. A planter said he scarcely found a rain-free period when the plants could be sprayed with pesticides. More often than not, he said, there would be a downpour soon after the spraying, making the exercise redundant.