Financial Daily from THE HINDU group of publications
Friday, Oct 11, 2002
Agri-Biz & Commodities
Upasi seeks Tea Board aid to boost orthodox output
KOCHI, Oct. 10
THE United Planters' Association of Southern India (Upasi) has sought financial assistance from the Tea Board for enhancing production of orthodox tea in South India.
Mr N. Dharmaraj, Chairman, Tea Committee, told Business Line that Upasi had already made a request to the Tea Board as major producers of the association were of the view that some sort of financial assistance would definitely of help in enhancing orthodox production in the region from the current low level of about 35 million kg.
He said South India was predominantly an orthodox tea-producing region and its production during 1981 was to the tune of 63.8 m kg and that of CTC 58.2 mkg. However, during 2001, orthodox production in South India declined to 34.8 m kg whereas CTC production increased to 166.5 mkg. Thus orthodox production registered a decline of 45 per cent and CTC production recorded an increase of 185 per cent during 1981 and 2001 in the region.
The highly skewed production in favour of CTC has considerably altered the product-mix of the region and this is generally attributed to the Russian demand apart from local consumption needs. But, of late, there were reports indicating the shift in Russian demand towards orthodox, Mr Dharmaraj said.
Tapping this potential in an already established market such as Russia deserves utmost priority, he said. For this, there should be a re-orientation in the product-mix. This obviously is possible only through substantial increase in the orthodox output. ``Towards this purpose, it is necessary that an incentive be given to the production of orthodox teas. But it will not help if the incentive is offered only for the incremental production,'' he said.
The producers need to have some sort of assurance from the board so that they can plan properly for exporting the teas produced and ``we are sure that with proper planning and incentive, there will be proper utilisation the existing capacity for orthodox tea manufacture which is approximately 55 mkg''.
An analysis recently carried out by Upasi pointed out that an idle capacity to the tune of 20 to 30 per cent existed and it could be appropriately tapped provided the incentives are in place.
``For changing over from CTC to orthodox, the producers have to incur an additional amount of Rs 6 per kg and unless there is considerable difference in the price fetched, they will not be motivated for conversion of CTC to orthodox,'' Mr Dharmaraj said.
Therefore, Upasi had reiterated its earlier stand that the Tea Board consider giving incentive of a minimum Rs 6 per kg for all the orthodox teas produced at least for a period of six months. The association has also suggested that to qualify for the incentive it could be stipulated that this would be available for only such quantities with proof of export to any country.
Any form of direct incentive for exporters can be independent of this scheme, he added.
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