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TN Govt to take part in tea auctions -- Plans to procure 200 t/month

Our Bureau

CHENNAI, July 11

THE Tamil Nadu Government has announced a market intervention mechanism to shore up green tea prices.

Under the scheme to be taken up with immediate effect, the Government will participate in green tea auctions through Incoserve (Tamil Nadu Small Tea Growers' Industrial Cooperative Factories Federation Ltd), a State Government undertaking, and procure 20 0 tonnes of tea per month. This is expected to help small farmers in the Nilgiris to get around Rs 75 per kg green tea, according to an official press release.

Incoserve will process and blend the tea and supply it to the Tamil Nadu Civil Supplies Corporation for marketing in small packs at reasonable prices, according to the release.

The Government's move follows the crash in tea prices to Rs 33 per kg from Rs 69 in 1998-99, the release said.

When contacted by Business Line, tea growers welcomed any move that would increase off-take from the auctions, but were sceptical whether the 200 tonnes that the Government proposed to buy at the auction each month would have any impact on prices.

For instance, while Incoserve is expected to purchase about 200 tonnes per month, the average off-take from Coonoor auctions is around 8 lakh kg per week. During the recent peak period, sales went up to 25 lakh kg per week. South India produces about 200 million kg tea per year and 80 per cent is sold through the auctions in Coonoor, Kochi and Coimbatore, according to tea growers.

While the details of the Government's scheme are not available, industry sources wondered how the quantities proposed to be purchased by Incoserve is likely to push up prices to Rs 75 per kg against the ruling Rs 50.29 per kg.

In 2000, the total production in south India was 204.5 million kg, and 170.3 million kg was auctioned _ Coonoor (70.9 million kg), Kochi (66.1 million kg) and Coimbatore (33.3 million kg). The average price at the auctions was around Rs 44.64 per kg.