13_chapter 6.pdf

CHAPTER -VII MARKETING

6.1

OF

TEA

^4ARKETING OF TEA IN WORLD

In an agro based industry like tea, its economic depend

on

years,

the

heights like

its

with

marketing strategies. During

international

trade in tea

emergence of many new tea

operations

the

has

last

30

obtained

producing

new

nations

kenya, Malawi, Argentina & Turkey. In 1950's tea

used

to be one of the most important foreign exchange earner India

with about 19

earnings

coming

behind.

percent of the total foreign

from

tea, and its

competitors

for

exchange were

Srilanka occupied the second position in the

trade contributing only one half of India's share.

far

world

Togi ther

the two countries accounted for two third of the global output. about

The

20

remainder was shared in

small

tea

quantities

countries. During mid-eighties, India

by

failed

to

satisfy the demand for Indian tea in world market and small non

traditional tea growing countries like kenya

and

some

other African countries took the opportunity to fill in gap with their CTC tea and captured some of the

the

traditional

markets. Another advantage, which affected India's share the

international

market

has

been,

constant

throughout the year by these small countries and

terms way

production

and

regular

consistent supply of tea in the world market.

process

they

have assumed a place in the world

in

In

this

market

of supply at lower cost. The entry of China in a

in big

in the international market in recent years has been

a

development with significant implications for the Indian tea

IP7

Industry. India in

despite its size is relatively minor

the world export market in recent times. It

accounts

for less than one half of the one

at

player present

percent of

the

total global export trade. Quite apart from developments

in

other tea producing and consuming countries, which may had a bearing

on

the pattern of tea disposal in

India,

several

other factors are relevant in decreasing share of Indian tea trade.

Given

fluctuated years, in

the

fact

that

India's

tea

Exports

around a pivot of 200 m kgs in the

last

the entire increase in production has been

the

domestic

consumption

market.

The

growth

rate

have

of

thirty

absorbed domestic

of tea in this country has out-strips the

of production of tea. This phenomenon

rate

has been observed in

the

last 10 years. The demand for tea increases along

side

the

increase in national income but at a rate

higher

than

the

growth of production, which reflects that

the

share

falling

of Indian tea in world export is mainly due to steady

increase

in the domestic demand. Table 6.1 & 6.2 shows

Total world production & Exports

of tea during the last

years,i.e (1985-86 to 1994-95).The statistical figures that

world production has increased by 111.29

exports the

have increased

last

10

years,

by marginally 7.08 which

reflect

that

increased at more rapid pace than exports.

R8

percent

percent

the 10 show and

during

production

has

Table 6.1 WORLD TEA PRODUCTION AND EXPORTS DURING 1985-86 To 1994-95 YEAR

Total Production of Tea in World ( in million KG.)

Total Exports of Tea ( in million KGS)

% share of Export of Total Prod.

1985-86

2289,969

954,172

41.66

1986-87

2276,133

973,488

42.76

1987-88

2339,610

974,037

41.63

1988-89

2476,053

1037,443

41.89

1989-90

2439,310

1125,736

46.14

1990-91

2568,500

1135,434

44.20

1991-92

2604,901

1078,883

41.41

1992-93

2479,630

1017,534

41.03

1993-94

2598,587

1153,130

44.37

1994-95*

2548,676

1021,804

40.09

INCREASE OF DECREASE OVER 1985-86 Source

-

111.29

7.08

(1.07)

(.68)

Tea Board Statistcs 1992-93 Figures in Parenthesis represent annual increase

iqq

Tible 6.2 PRODUCTION AND EXPORT OF TEA FROK MAJOR TEA PRODUCINB NATIONS

COUNTRY

1994- 95 1985 - 86 PRODUCTION PRODUCTION EXPORTS

X increase EXPORTS Production

Export

656,162 28.70

214,935 22.53

743,780 29.56

146,462 14.42

13.35

(31.85)

Sriianka 215,305 « 9.40

197,580 20.71

243,56J 9.68

224,235 22.08

J3.J2

13.49

China

432,337 18.88

136,864 14.34

588,468 23.38

179,679 17.70

36.11

31.28

Indonesii1 132,347 4 5.77

90,121 9.44

129,794 5.15

84,916 8.40

(1.92)

(5.77)

147,094 6.42

126,086 13.21

209,422 8.32

184,211 18.19

42.37

46.09

Uganda «

5,784 .25

1,254 .13

13,461 .53

10,971 1.08

132.72

774.88

Halatfi «

39,954 1.74

37,147 3.89

35,140 1.39

31,672 3.14

(12.04)

(14.73)

Turkey

137,116 5.98

859 .09

134,350 5.34

5,200 .51

(2.01)

(5.05)

Bangladesh 43,285 * 1.89

30,306 3.17

51,642 2.05

23,640 2.32

19.30

(21.99)

1,805 .IB

86,303 3.43

345 .03

(9.63)

80.88

18,000 .71

-

(88.16)

-

12.53

5.82

India §

4

Kenya 4

i

Japan 4

95,500 4.17

USSR/CI'si 152,100 4 6.64

-

4

232,803 10.16

117,003 12,26

261,989 10.41

123,818 12.19

Total

2289,787

953,960

2515,912

1015,149

Others

Source

;-

Note

!-

Tea Board Statistics 1991-92 and 1993-94. Tea Company Report 1994. • denotes percentage of total Production and Exports. Figures in pirenthesis represents decrease.

2.00

Table

6.2

shows that share of India in

tea

exports

has

declined during the last 10 years, where as Srilanka, &

Kenya have gained in international tea exports.

India's share in the exports of tea was 22.53

China

In

1985

percent which

stands at 14.42

percent in 1994, thus registering a fall of

31.85

during the last 10 years. Main

fall due

percent

to

loss

around 80

of

Russian

USSR

market

and

increased

& C.I's countries which

domestic

were

importing

percent share of Indian tea in 1994. Consequent

trade

of

protocol

the Soviet union and the

between

India & Russia,

exports

there

has increased to General Currency

particularly compensate

United the

50

kingdom,

which made

million kgs short

on

absence was

million kgs drop in tea export to Russia, however

million

been

percent of their tea from India in 1985 have just

disintegration

of

for

of India's share in the international market has

consumption.

41

reason

fall

of

a

a

50

its share

Areas

it

the

(GCA)

possible

by

around

kgs. However fact remained that the USSR

to 20

was

very

important market that need to be serviced side by side

with

General Currency Areas country. Table 6.3 shows the position of main importing countries of tea from India. It is evident from

the

table

that

the

international

market

has

Republic

Iran,

where

70.68

and

percent

growing adequate

major

loss

to

been reported its

share

India

from has

domestic surplus.

market with Viewed

a capacity

from

201

this

USSR,

gone

. Exports can arise only from a to

angle.

in

the Arab

down

by

strong

and

generate

an

Table

6.4

TABLE 6.3 EXPORTS OF INDIAN TEA IN 1965 md 1994

Country

Qty •kg

1995 % Valu? in share thousand

Value Per KQ

Qty nkg

1994 S share

Value in thousand

Value Per Kg

United Kinqdo*

25,276

11.81

6,52,055

25.70

28,013

18.59

131,02,31

46.77

USSR

96,598

45.13 30,57,086

Ti -rr

37,292

24.75

268,94,28

72.11

3,631

1.72

1,33,902

36.87

412

.27

2,70,31

65.61

17,321

8.09

4,88,152

28.18

4,233

2.82

23,90,82

56.48

7,408

3.46

i|4tj)U/T

13.07 96,01,20

48.72

18,939

8.85

7.89,563

41.68

3,592

2.38 38,03,23 105.88

999

.47

46,844

46.89

2,640

1.75

28,91,37 109.52

Arte Pica

1,736

.81

72,9)2

41.93

6,633

4.40

37,20,88

Semany

3,061

1.43

1,36,754

44.67

6,346

4.21

71,70,79 112.99

Ireland

2,416

1.12

60,7^5

25.15

2,452

1.63

12,42,53

50.67

Others

36,636

17.11 12,71,689

34.71

39,373

26.13 2,78,26,28

70.67

100

39.00

1,50,691

100 9,89,14,00

79.55

Afganistan Arab Republic Poland

Iran Japan

-

Source

2,14,021

:-

65,52,996

19,705

56.09

Tea Coapany Report i99lf Others countries include Ireland, Netherland, Rest of Europe, Iraq, Iran, Saudi Arabia, Persian 6ulf, UAE, Jordan, Rest of Middle East, Pakistan, Sudan, Tunisia, Canada, Australia, NetKzealand.

202

~V{Q>Lt 6-^ PRODUCTION, DOMESTIC IN INDIA DURING Year

Production (In tonnes)

CONSUMPTION 1985-86 TO

AND EXPORTS 1994

Domestic Retention (In tonnes)

Export (In tonnes)

1985-86

656,162

441,225

214,937

1986-87

620,803

416,571

204,292

1987-88

665,251

462,498

202,753

1988-89

700,014

498,267

201,747

1989-90

688,105

475,443

212,662

1990-91

720,338

510,314

210,024

1991-92

754,192

551,274

202,918

1992-93

732,322

557,360

174,962

1993-94

758,063

582,745

175,318

1994-95

743,780

592,318

146,462

13.35 1.26*

34.24 2.98*

(31.85) (3.48)

Increase/ Decrease over 1985 Source

Tea Company Report 1994. Tea Board statistic 1991-92 and 1993-94

Note

* denotes annual increase. Figures in parenthesis represents decrease,

103

shows

the

India's production,

domestic

consumption

exports

during the period 1985-94. Table shows that

India's

production and domestic consumption have

by

13.35

and

declining shows

34.24

trend

percent but

exports

and decreased by 31.85

and

though

increased

are

showing

percent.

Fig

the trend in India's production,domestic

a 6.1

consumption

and Exports, which shows that though production and domestic consumption trend.

are

rising

but exports

According to one estimate 80

are

showing

decling

percent of all Indian

house hold drink tea, the average per capita consumption only .630 kgs per year, which is probably one of the

is

lowest

among the tea drinking countries. Pakistan has a consumption of

.93 kg per capita, while Egypt touches a figure of

kgs.

Turkey is among the highest consumer nations

1.33

at

2.49

kgs. An traditional consonance prices,

estimate tea

with

but

shows that export

growing the

cyclical

movement

the

fluctuated

in

in

international India,

the

higher than that of its rivals

and

prices. Average

export

percent more than domestic price where

have

of

this has not been true in case of

prices of Indian tea is domestic

countries

earnings

as difference was

price

in

1985

was

(Rs. 45.73 and Rs.

41

32.24)

62 percent in 1994 (Rs.65.64

and

Rs. 40.51). The Internationally over come

above

analysis

Competitive

certain

show that Indian

tea

in

order

Industry

to

be

has

to

bottlenecks, like developing large scale

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domestic market.

market

which

Promoting

markets,

with

encouraged.

will back

new

marketing

brands of

of

its

march

tea

value

in

added

in

overseas

international tea

India has tremendous potential to

should in^rove

be its

position in the export of value added tea . According to the Tea Board statistics 1990 as

was about 6

Srilanka

realises

of India's value added tea

percent of total world tea export,

share

is about 15

premium price

to increase 6.2

share

percent

value

in

where

added

tea

and serious efforts should be

made

share in this market segments.

MARKETING

OF TEA IN INDIA

The Domestic market scinario of Indian tea shows that, there has been consistent increase in the domestic consumption

of

tea

in India, but sale of tea is showing a decrease.

Table

6.5

shows that sale of te^ in the domestic market has

been

fluctuating

on year to year basis due to over all slump

the market. It of

tea

fell

shows that there has been decrease in sale

in major tea growing area's,in case of

down

in

by 1.74

Assam, sale

percent annually, where as in

case

of

West Bengal the fall in the sale volume is more rapid, where sale Tamil

fell

by 2.30

percept annually. In

South

India

Nadu reported a decrease in its sale during the

10 years.

too last

One reason which can be attributed for this

low

arrivals has been the leading tea brokers. There is trend in procurring

tea

directly from gardens on behalf

of

there

buyer.As a Direct Ex- garden purchase of tea helps to

reach

204.

TABLE 6.5 STATE WISE SALE OF TEA IN INDIA DURI^
State

1985-86

1986-67

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

Assat

2,54,063

2,38,643 2,43,853

2,44,121 2,62,213 2,48,163 2,60,010 2,42,734 2,36,282 2,13,132

1,21,140

1,09,677 1,18,310

1,29,709

West Bengal Tripura

1,179

1,652

2.161

187

430

422

Hisachal Pardesh Tatil Nadu

74,094

Kerala

44,388

Kamataka Others* Total Sales

Source

90,697

79,660

2,338

219

99,299 1,08,064 1,03,953 2,805

445

1,27,547 1,11,929

675 4,95,726

416

462

334

4,41,515

4,44,8^

5,04,268

423

2,417

370

2,737

521

96,723

87,887

95,9«

3,202

2,755

2,612

541

514

527

93.559

91,288

73,094

81,965

81,343

27.540

38,723

28,548

29,215

29,657

649

1,010

1,027

495

741

1,349

2,384

2,275

1,408

1,805

4,77,114 4,82,111 5,00,626

4,48,144 4,40,521 4,25,962

: Tea Board Statistic 1991-92, 93-94. Tea Co«pany Report 1994. • Others include Bihar, Uttar Pradesh, Nagaland, Sikkin, Arunachal Pradesh. For year 1986-87 to 1988-89 combined sale of South India shotm, since breakup is not available.

aoT

fresh tea faster to consumers as against a delay of a

month

auction

in

case the commodity

goes

through

atleast

the

procedure. However the declining trend in

normal

offering

caused

a reversal to the up swing in price as evident

from

table

6.6. There has been increase in average price of

tea

per

kg by 90 percent with annual increase of 6.62

percent.

In comparison to national average of tea sale & averge price of tea in India, in Himachal Pradesh also the sale of tea average prices of tea have gone up, with the improvement

& in

the quality of made tea. The

marketing

of

regulated through auctions.

tea The

in

internal

market

is

Tea Board statistics shows

that nearly 60 to 70 per cent of the overall sale of tea through auctions in India in relation to total and

is

productions,

balance is through private & Ex garden sale.

The

main

auction centres for North Indian Tea are Calcutta, Siliguri, Guwahati Amritsar in India & London in International and

for

Coonoor,

South

Indian Tea,

Coimbatore

at

auction

national

centres level

and

are

market Cochin,

London

at

international level. It is evident from table 6.7 that in case of North Indian tea through auction

their has been decrease of 18.84

percent during 1985-1994 in real terms and trend in sale also declining as depicted

in figure 6.2

is

In case of South

Indian tea though their has been fall in sale of tea through auctions by 6.05 percent in real terms (Table 6.8), but trend in

sale is

showing a upward

loQ

the

slope (Fig - 6.3). The

TABLE i.i STATE WISE AVERAGE PRICE OF TEA IN DIFFERENT STATES DURING 1985-86 AND i9'?4-95.

State

1955-66

1966-67

1987-S8

1966-69

1989-90

1990-91

1991-92

AssatR West BenQil

21.64

21.69

23.t5

23.01

35.53

41.25.

37.96

30.77

31.56

36.05

40.19

56.63

62.74

60.97

Tripuri

14.53

17.11

21.34

19.73

29.K

49.14

28.85

Hisachal Pardesh

15.61

16.02

16.61

20.59

16.00

20.97

19.52

27.23

27.38

30.90

31.00 40.51

39.90

Others*

15.77

18.36

30.66

40.52

33.13

31.45

39.88

35.21

44.61

34.80

Average

19.81

20.45

24.96

35.94

44.93

39.11

39.95

49.63

37.64

South * India Tea

Source

1992-93

1993-94

199#-95

48.11

37.78

72.03

77.77

48.81

31.20

43.58

33.63

19.45

39.90

! Tea Board Statistic 1991-92, 93-94. Tea Coapany Report 1994. * Average Price of South Indian Tea is taken as a break up for state is not available. * Others include Bihar, Uttar Pradesh, Nagaland, Siikis, Arunachal Pradesh.

20 q

TABLE

L.l

SALE THRO'JSH AUCTIONS OF NGP.TH INDIA TEA

Year

Calcutta

Siliguri

Suwahati

1985-66

176780 45.14

86917 21.94

120251 30.36

165

9896 2.52

396.029

383.49

.04

142265 39.05

72002 19.76

136196 37.38

201 .06

13655 3.75

364.319

377.92

132627 35.50

80583 21.59

147651 39.53

429 .11

11904 3.81

373.194

372.35

139546 36.20

98981 25.67

138107 35.82

295

8826 2.24

385.460

366.78

Afritsar

London

Total

Trend Values

-T

« 1986-B7

« 1967-88

« 1988-89

«

.07 1

1989-90

« 1990-91

« 1991-92 4

1992-93

» 1993-94

) 1994-95 i

135141 36.24

78354 21.01

151511 40.63

4?1 .14

7399 1.98

372.856

361.21

129204 34.93

89976 24.34

140931 36.12

390 .JO

'5141 :.4s-'

369.644

355.64

13899B 37.00

91555 24.37

136644 '>,.91

386 .13

5999 1.59

375.554

350.07

112912 32.08

82395 23.41

149695 42.54

406 .11

6476 1.86

351.684

344.49

102342 30.56

75786 22.63

151326 45.19

579

334.814

338.93

•i7

4781 1.46

-94661 29.45

83581 26.00

137715 42.84

394 .15

5042 1.56

321.393

333.36

(3.83)

14.52

112i97

(49.05)

(18.84)

Increase/ (47.05) decrease over 1985

Source

:-

Tea Board Statistic - 1991-92

Tea Coflipany Report - 1994 Notes

!-

» denotes percentlaoe of total sale. Figures in parenthisss represertts percentage of total auction during the year.

210

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TABLE 6.8 SALE THROBH AUCTIONS OF SfflJTH INDIAN TEA (1985-86 TO 1994-95)

Year

Cochin

Coonoor

Coiabatore London

1985-86

65743 (55.10)

24266 (20.33)

29148 (24.42)

1966-87

62477 (68.54)

28220 (30.95)

-

1987-88

52221 (65.40)

27439 (34.36)

1988-89

54094 (42.41)

1989-90

157

Total

Trend values

119.314

104.28

453 (.49)

91.150

105.66

-

177 (.22)

79.837

107.04

31621 (26.36)

39832 (31.23)

-

127.547

108.42

50618 (45.20)

34863 (31.13)

26488 (23.65)

-

111.969

109.8

1990-91

52334 (42.98)

36951 (30.35)

32463 (26.66)

-

121.748

111.18

1991-92

59606 (45.28)

40912 (31.08)

31082 (23.61)

34

131.634

112.56

(.02)

51361 (49.91)

34196 (33.23)

17141 (16.65)

102.888

113.94

(.18)

52028 (46.43)

41199 (36.76)

18465 (16.47)

112.056

115.32

(.32)

51034 (45.52)

41242 (36.79

19665 (17.54)

112.094

116.70

(.13;

Increase/ (22.37) Decrease over 1985

69.95

1992-93

1993-94

1994-95

Source :-

/T7

BTl

(.13)

190 364

153 (2.54)

(6.05)

Tea Board Statistic 1991-92 & 1993-94. T^a Coapany Report - 1994 Figures in Parenthises reoresents decrease over 1985.

iii

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effect

of sale through auctions

as

6.9 shows that sale through auctions

reported

has

in

decreased

in real terms by 15.58 percent and showing a declining trend in

Fig 6.4 . In case of sale of India

auctions, down

both

tea through

share of North and South India

has

by 49.05 and 2.54 percent respectively, but

otherwise

rising

as shown in

Fig

6.5 .

The

London gone

trend

decreasing

trend of sale through auctions is reported to be because marked which

shift is

is

change of sale towards value added

tea

getting more popular among the consumers

of sale

in

the

forms of tea Bags & Instant tea. As

a result of decreasing shares of sale

through

auctions. The average prices of tea at auctions are

showing

a increase. It is evident from table 6.10 & 6.11 that except for

prices

for

Indian, tea at London

auction

which

falling in real terms average price of tea per kg. has

are been

showing a rising trend at Indian auctions.lt is evident from table 6.10 that Average price of tea at all auction in

India

are showing a rising trend

auctions.

except

centres

the

London

Table 6.11 shows that in case of North Indian tea

prices rose by 85.02 percent and south Indian there has been up

swing of 51.04 percent with combined increase

percent, london shows showing

of

68.46

but in comparsion to that prices of Indian tea

auctions the a

has gone down. Fig 6.6 6.7,

6.8

trend of average price of tea

at

increasing

analysis

trend. The

above

exports & marketing of Indian tea shows

2-H

that,

and

auctions, of

at 6.9 is the

although the

Table 6.9 CQHBINED SALE OF NORTH INDIA ti SOUTH IWIA THROUGH AUCTIONS

Year

Total Production

Total Sale Through Auction

X share of auction of total production

Trend Values Indian Auction

London Auction

1985-0.

i&b\t>2

515343

78.53

546.6

46.74

198i-B7

620803

455469

73.36

530.71

55.13

1987-88

665251

453031

68.09

514.82

63.52

198&-B9

700014

513007

73.28

498.93

71.91

198^90

688105

484825

70.45

483.04

80.30

1990-91

720338

491392

68.21

467.15

89.69

1991-92

754192

507218

67.25

451.26

97.06

199^93

732322

454772

62.10

435.37

105.47

1993-94

758063

446870

58.94

419.48

113.86

1994-95

743780

433487

58.28

403.59

122.25

Increase/ Decrease over 1985

13.35

(15.88)

Source

;

Tea COMPANY REPORT 1994

Note

:

Figures in parenthesis represents decrease.

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TABLE 6.10 AVERAGE PRICES OF TEA AT AUCTIONS

Calcutta

GuHahati

Siliguri

A«ritsar

1985-Bfc

26.60

22.85

19.92

17.49

22.74

16.11

22.93

198.5

1986-87

26.94

24.15

22.13

14.65

19.76

16.25

20.65

141.9

1987-88

28.97

24.83

23.61

14.26

22.67

19.27

ZkiaOr

122.5

198&-89

28.46

24.65

23.25

14.14

21.00

18.05

22.41

125.5

198^90

39.56

46.59

36.39

21.74

34.15

32.34

35.46

144.8

1990-91

49.07

43.10

41.37

30.38

40.09

35.97

39.28

142.3

1991-92

48.22

40.90

37.79

32.67

35.53

28.46

34.37

132.0

1992-93

43.86

40.02

37.25

28.82

34.99

30.63

32.29

116.6

1993-94

54.95

50.07

47.82

33.80

43.91

40.72

43.6

92.16

1994-95

49.56

43.46

38.19

31.63

34.39

27.79

31.12

91.6

Increase/ Decrease over 1985

86.31

90.19

91.71

80.84

51.23

72.50

35.71

(58.85)

Yejp

Source

Tea Board Statistics 1991-92. Tea Company Report 1994.

Note

Price in London Auction in Pence. Figures in Parenthesis represents.

Cochin

'2J9>

Coonoor

Coiiit>atore London

TABLE 6.11 COHBIND AVERAGE PRICE OF TEA AT NORTH AND SOUTH INDIA AUCTIONS 1985-86 TO 1994-95

Coflbined Average Average Trend Price p/(cg

Year

North India Average Trend Price p/fcg

South India Average Trend Price p/kg

1985-86

21.71

14.43

20.59

19.72

21.15

19.61

198.5

94.81

1986-87

21.96

18.51

18.88

21.87

20.42

22.17

141.9

102.85

1987-88

22.91

22.59

21.92

24.02

22.41

24.73

122.5

110.85

1988-89

22.62

26.67

20.48

26.17

21.55

27.29

125.5

118.93

1989-90

33.57

30.75

33.98

28.32

33.77

29.85

144.8

126.97

1990-91

40.98

34.83

38.44

30.47

39.71

32.41

142.3

135.01

1991-92

39.89

38.91

32.78

32.62

36.33

34.97

132.0

143.05

1992-93

37.48

42.99

32.63

34.77

35.05

37.53

116.6

151.09

1993-94

46.66

47.07

42.72

36.92

44.70

40.09

92.16

159.13

1994-95

40.17

51.15

31.1

39.07

35.63

42.65

91.6

167.17

Increase/ Decrease over 1985

85.02

Source Note

51.04

68.46

Tea Board Statistics 1991-92. Tea Company Report 1994. Figures in parenthesis represent decrease.

:iiS

London Auction Average Trend Price p/fcg

(53.85)

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achievements on the production encouraging pace.

but

The

side has been favourable and

the exports have not increased

total

exports have

been

stagnant

with

same

around

200

million kg. The marketing efforts have not been at par

with

our

much

production

efforts. For too long there has

been

dependence on the auction system.The auctions are necessary, however now with the decreasing share of auctions sale, sale

of

packeted

encouraged

tea

at

reasonable

prices

should

to obtain stable return in the capitive

the be

market,

which require direct marketing approach. In the open

market

compitition,

price is the prime consideration, in order

to

improve

market share for Indian tea,

be

the

cost

should

effectively controlled. So three way approach for its export improvements production augumentation , quality

improvement

and cost reduction are reqbired. 6.3

MARKETING

Product

OF TEA IN HIMACHAL PRADESH

Diversification

aspect

of

any

market

forces,

is an

important

and

Industry. In order to keep the production of tea in

progressive

pace

with

Himachal

the

Pradesh

swings- between green tea ^nd black tea, but

with

changing

taste

has

increased

demands,

during

the

last

the produbtion of black tea five

years.

From

the

very

beginning

production of green tea was specialised in Himachal and

before

partition

and inception

factories in the region, nearly 75 produced

in

the

of

Pradesh

Co-operative

tea

percent of the green tea

region ^ound its way

to

Afganistan

Karachi Harbour. However atter partition, the borders

via

being

closed for trading operations between Pakistan & India,

the

tea trade to Afganistan was diverted through Bombay Harbour,

which

started

expenditure switched

entailing delay in delivery in

transportation.

and

additional

Consequently

Afganistan

over to China & other tea producing countries

for

meeting their requirement of green tea. Consequent upon

the

fall

in the demand of green tea, the planters

in

Himachal

Pradesh started producing black tea. Till the end of 60's the total tea produced in the region which

was used to be sold in the Amritsar

Auction

used to be the largest trading centre for

Market

the

Green

tea India. The tea used to be sold through the middle man's, since there was no direct link between the manufactures

and

the

the

traders. But certain malpractices such as

false

accounts

of

the tea sold to

the

giving

manufactures

and

charging exorbitant interest led to the very low returns

to

the

manufactures and producers. Keeping this bottleneck

in

view

need was felt to eliminate the middlemen. This led

to

the formation of agency. The Kangra Tea Planters Supply Marketing members

Co-operative Industrial society Limited at the time of registeration. Presently

registered consist blending conducted

with

of

this

traders

society.

The

who sell to

and

exports.

Though

by

society,

i^s

Amritsar

the

the

ultimate

bigger

auction

with these

Tea

and 16 are

market

parties

for

of

tea

was

purchases

are

the

individual traders in Amritsar market, who at times were not regular this

in lifting the stocks & making prompt payment.

resulted in drying up of the liquid resources

in

All the

hands of society & delaying the payments to its members. At

present the tea produced in

are sold at two auction

Himachal

Pradesh

centres in India. Green tea is sold

through the Industrial society at Amritsar Auction and Black tea

produced in the region is sold at Calcutta through

the

Calcutta Tea trading Corporation, the largest selling agency for black tea sale in North India. The Calcutta tea corporation

is

registered sent

being

operated through

trading

broker's

who

with this Corporation . Tea produced is

to the ware houses maintained by this

are

firstly

corporation

at

Calcutta, from where the broker for the region draws out the sample for sale at auction, on the basis of which the tea is sold.

The

operative

Kangra

tea

planters

supply

Industrial society charges 5

&

Marketing

percent

Co-

commission

on total sale done by it, where as broker at Calcutta Market Charges

1

percent

Commission

on

total

sale

done

at

Calucutta Market. The Himachal

analysis of the sale of the tea

Pradesh

Society,

is based on sale made by

Palampur,

factories.

Bir

and

Baijnath

produced

the

in

Industrial

co-operative

tea

The sale figures of Dharamsala co-operative

tea

factory which is manufacturing black tea are not taken

into

account

case

of

due to non availability.

Table 6.12 shows in

sale by Palampur tea factory there has been increase

153.76

percent

during the last 10 years

increase of 9.75 percent in real terms. operative

with

the

annual

In case of Bir co-

tea factory it is evident from table

6.13,

6.14

and 6.15 that sale of black tea produced by the factory gone

down

percent

by 53.73 percent with annual

during

produced

by

percent

with

the last 10 years.

the

factory reported

decrease

The sale of an

increase

annual increase of 9.2 6 percent. 126

of

of

has 7.41

green

tea

of

42.53

The

total

TABLE 6.12 TREND IN SALE OF TEA OF PALAMPUR CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Actual Sale

Year

Trend

1985-86

154.12

236.65

1986-87

352.71

254.95

1987-88

355.99

273 .25

1988-89

170.11

291.55

1989-90

348.61

309.85

1990-91

260.36

309.85

1991-92

260.36

328.15

1992-93

406.30

346.45

1993-94

386.65

364.75

1994-95

391.11

401.35

Increase/ Decrease over 1985

153.57 (9.75)

Source

:

Based on Annual Report of Co-op. Tea Factory Figures in parenthesis represents annual increase

2.21

TABLE 6.13 TREND IN SALE OF TEA FACTORY Year

BLACK TEA OF BIR CO-OPERATIVE 1985-86 TO 1994-95

Actual Sale

Trend

1985-86

31.84

39.25

1986-87

30.23

38.06

1987-88

55.42

36.87

1988-89

20.31

35.68

1989-90

76.86

34.49

1990-91

50.86

33.30

1991-92

29.34

32.11

1992-93

42.05

30.92

1993-94

40.05

29.73

1994-95

14.73

28.54

Increase/ Decrease over 1985 Source

(53.73) (7.41) Based on Annual Report of Co-op. Tea Factory Figures in parenthesis represents total decrease and annual decrease

1:^6

TABLE 6.14 TREND IN SALE OF GREEN TEA OF BIR CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Sale

Trend

1985-86

30.66

41.46

1986-87

74.65

44.50

1987-88

60.63

47.54

1988-89

47.31

50.58

1989-90

44.48

53.62

1990-91

50.81

56.67

1991-92

52.37

59.71

1992-93

89.42

62.75

1993-94

77.77

65.79

1994-95

74.36

68.83

Increase/ Decrease

(42.53) (9.26)

over 1985

Source

Based on Annual Report of Bir Co-operative Tea Factory. Figures in parenthesis represents total and annual increase.

ixq

TABLE 6.15 TREND IN TOTAL SALE BIR OF CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Sale

Trend

1985-86

33.85

48.51

1986-87

77.67

51.53

1987-88

66.17

54.55

1988-89

49.34

57.57

1989-90

52.16

60.59

1990-91

50.81

63.61

1991-92

52.37

66.63

1992-93

89.42

69.65

1993-94

77.72

72.95

1994-95

74.36

76.04

Increase/ Decrease over 1985

Source

(119.67) (8.18)

Based on Annual Report of Bir Co-operative Tea Factory. Figures in parenthesis represents total and annual increase.

250

sale of Bir co-operative tea factory has increased by

119.SI

percent

8.18

during

percent.

Table

Baijnath black

1985-1994 6.16,

with

annual

increase

6.17 and 6.18 shows

tea

has

sale

annual

the

sale

decreased

by

95.62

percent

Baijnath

of 19.83 percent.

co-operative

with

annual

percent

The total tea

tea factory has increased

with

sale by

The

Baijnath

production

tea.

increase

of sale in

case

of

Bir

since these two factories are of green tea.

from

specializing

Whereas in case of

10 and

co-operative tea factories has been reported

tea,

factory

main

of

34.35

percent with annual increase of 5.04 percent during last years.

of

In case of green

of factory has increased by 196.19

increase

green

of

co-operative tea factory, which shows that sale

decrease of 4.63 percent during 1985-1994. tea

of

Palampur

95 percent of the total tea production is of

in tea

black

The total sale of black tea as reported in table 6.19,

shows an increase of 150.27 percent with annual increase

of

9.60 percent, whereas in case of green tea the increase

has

been to the tune of 339.23 percent with 15.94 by

percent.(Table 6.20)

annual increase

The total sale of tea

the co-operative tea factories in Himachal

increased

percent.(Table sale

6.21)

produced

Pradesh

by 180.50 percent with annual increase FIG 6.10 to 6.19 shows the

of tea which shows that except for black tea

of

of

has 10.86

trend

in

produced

by Bir and Baijnath tea factories which are showing downward slope, sale of tea is showing a rising trend. In comparision to the rising trend in sale of operatives,

the

fluctuating

in

average

price of tea

real terms table 6.22

:2^i

are shows

more that

or

coless

average

TABLE 6.16 TREND IN SALE OF BLACK TEA OF BAIJNATH CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Actual Sale

Year

Trend

1989-90

24.89

1990-91

7.3

14 .89

1991-92

14.13

11.18

1992-93

1.99

7.47

1993-94

7.34

3.76

1994-95

1.09

.05

Increase/ Decrease over 1989

Source

18.6

(95.62) (4.63)

: Based on Annual Report of Baijnath Co-operative Tea Factory Figures in parenthesis represents total and annual decrease. Figure from 1985-86 to 1988-89 not available.

X31

TABLE 6.17 TREND IN SALE OF GREEN TEA OF BAIJNATH CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Sale

Trend

1989-90

19.99

25.48

1990-91

46.55

34.42

1991-92

46.01

43.36

1992-93

59.10

52.30

1993-94

57.86

61.24

1994-95

59.21

70.18

Increase/ Decrease over 1989

Source

(196.19) (19.83)

Based on Annual Report of Baijnath Cooperative Tea Factory. Figures in parenthesis represents total and annual increase. Figure from 1985-86 to 1988-89 not available.

2.^z

TABLE 6.18 TREND IN TOTAL SALE OF BAIJNATH CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Sale

Trend

1989-90

44.89

49.78

1990-91

53.92

52.82

1991-92

60.14

55.82

1992-93

61.09

58.84

1993-94

64.42

61.86

1994-95

60.31

64.88

Increase/ Decrease over 1989

Source

(34.35) (5.04)

Based on Annual Report of Baijnath Cooperative Tea FactoryFigures in parenthesis represents total and annual increase. Figure from 1985-86 to 1988-89 not available.

rz4

TABLE 6.19 TREND IN TOTAL SALE OF BLACK TEA IN HIMACHAL PRADESH 1985-86 TO 1994-95 Year

Actual Sale

Trend

1985-86

157.30

240.31

1986-87

355.74

263.10

1987-88

361.48

281.95

1988-89

172 .14

300.77

1989-90

381.18

319.59

1990-91

272 .81

338.41

1991-92

423.37

354.23

1992-93

392.84

376.45

1993-94

379.75

394.87

1994-95

393.68

413.69

Increase/ Decrease over 1985 Source

(150.27) (9.60) Based on Annual Report of Co-operative Factories. Figures in parenthesis represents total annual increase.

23 S

Tea and

TABLE

6.20

TREND IN TOTAL SALE OF GREEN TEA OF CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Sale

Trend

1985-86

30.66

35.72

1986-87

74.65

47.76

1987-88

60.63

59.80

1988-89

47.31

71.84

1989-90

64.47

83.88

1990-91

97.36

95.92

1991-92

98.38

107.96

1992-93

150.52

120.00

1993-94

142.20

132.04

1994-95

134.67

144.08

Increase/ Decrease over 1985 Source

(339.23) (15.94)

Based on Annual Report of Co-operative Factories Figures in parenthesis represents total annual increase.

:2.56

Tea and

TABLE 6.21 TREND IN SALE OF TEA OF CO-OPERATIVE TEA FACTORIES 1985-86 TO 1994-95 Year

Actual Sale

Trend

1985-86

187.97

279.74

1986-87

430.39

310.44

1987-88

422.16

341.10

1988-89

219.46

371.84

1989-90

445.66

402.54

1990-91

370.18

433 .24

1991-92

521.75

463.94

1992-93

541.38

494.64

1993-94

514.61

525.34

1994-95

527.26

556.04

Increase/ Decrease over 1985 Source

(180.50) (10.86)

Based on Annual Report of Co-operative Tea Factory. Figures in parenthesis represents total and annual increase.

^37

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TREND IN TOTAL SALE OF GREEN TEA IN CO-OP. TEAFACTORIES FOR 1985-86 TO 1994-95

to b o o

I ACTUAL

z

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UJ —I

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1985

1986

1987

Source -

198S

1989 1990 YEARS

1991

1992

Based on Annual Report of Co-operative Tea Factories (F!G - 4-Ig

146

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1994

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247

TABLE 6.22 TREND IN AVERAGE PRICE OF TEA OF PALAMPUR CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Price

Trend

1985-86

15.71

36.34

1986-87

20.17

35.02

1987-88

19.42

33.70

1988-89

21.44

32.38

1989-90

29.74

31.06

1990-91

38.02

29.74

1991-92

32.16

28.42

1992-93

39.62

27.10

1993-94

46.57

25.78

1994-95

40.53

24.46

Increase/ Decrease over 1985

Source

(157.98) (9.94)

Based on Annual Report of Co-operative Factory Figures in parenthesis represents total annual increase.

2^9

Tea and

price

of tea in case of Palampur co-operative

increased annually

by 157.98 percent with increase of during

last

10 years, but

trend

tea

factory

9.94

percent

in

prices

depicted in FIG 6.20 are showing a declining trend. of

Bir

that

co-operative tea factories table 6.23,

In case

6.24

shows

average price of black tea and green tea has shown

increase

as

of 335.92 percent and 97.18 percent in real

an

terms

during the last 10 years, but trend in prices as reported in figure

6.21

Baijnath 6.64

case

of

co-operative tea factory prices have increased

by

percent

and 6.22 is showing a decrease.

since 1989-90.

Figure 6.23

In

shows

a

upward

slope in the average price realised by Baijnath co-operative tea

factory.

increased whereas tea

by

The combined average price of black tea 13.25

percent

annually

during

have

1985-1994,

the combined increase in prices of green and

black

is 9.83 percent with rising trend as reported in

table

6.25, 6.2 6 and figure 6.24 and 6.25. Main reason reported for fluctuation in prices tea

produced

quality the

in the region at auctions has been

survival

at

Palampur

Co-operative

through

poor

of tea produced in the region, which warrants that,

quality of tea should be improved to great

packet

the

of

teas Brand

the

and

auction centres.

The

extent

for

initiative of

the

tea factory to switch

labelling its few of

the

names like Bageshwari, Kailash

reght earnest in this regard.

over good is

towards varities step

in

ISO

TABLE 6.23 TREND IN

Year

AVERAGE PRICE OF BIACK TEA OF BIR CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Actual Price

Trend

1985-86

15.81

33.14

1986-87

15.13

31.82

1987-88

15.79

30.5

1988-89

20.92

29.18

1989-90

27.77

27.86

1990-91

21.49

26.54

1991-92

30.87

25.22

1992-93

31.76

23.94

1993-94

43.93

22.58

1994-95

68.92

21.26

Increase/ Decrease over 1-985

Source

(335.92) (15.86)

Based on Ainnual Report of Bir Co-operative Tea Factory Figures in parenthesis represents total and annual increase.

251

TABLE 6.24 TREND IN

Year

AVERAGE PRICE OF GREEN TEA OF BIR CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Actual Price

Trend

1985-86

15.31

22.57

1986-87

12.78

22.02

1987-88

15.22

21.47

1988-89

16.00

20.92

1989-90

26.18

20.37

1990-91

19.13

19.82

1991-92

31.39

19.27

1992-93

26.36

18.72

1993-94

34.44

18.17

1994-95

25.20

17.62

Increase/ Decrease over 1985

(97.18) (7.62)

Source

Based on Annual Report of Bir Co-operative Tea Factory Figures in parenthesis represents total and annual increase.

l^SI.

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TABLE 6.25 TREND IN AVERAGE PRICE OF TEA OF BAIJNATH CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Price

Trend

1989-90

25.24

27 .78

1990-91

30.92

28 .20

1991-92

29.18

28 .62

1992-93

26.28

29 04

1993-94

37.13

29 46

1994-95

37.13

29 88

Increase/ Decrease over 1989

Source

(47.04) (6.64)

Based on Annual Report of Baijnath operative Tea Factory Figures in parenthesis represents total annual increase.

-155-

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TABLE 6.26 TREND IN AVERAGE PRICE OF BLACK TEA OF CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Price

Trend

1985-86

15.76

11.92

1986-87

17.74

15.94

1987-88

17.60

19.96

1988-89

21.18

23.98

1989-9-0

28.75

28.00

1990-91

29.75

32.02

1991-92

31.51

36.04

1992-93

35.69

40.09

1993-94

45.25

44.12

1994-95

54.72

48.15

Increase/ Decrease over 1985

Source

(247.20) (13.25)

Based on Annual Reports of Co-op. Factories. Figures in parenthesis represents total annual increase.

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TABLE 6.2 7 TREND IN COMBINED AVERAGE PRICE OF TEA OF CO-OPERATIVE TEA FACTORY 1985-86 TO 1994-95 Year

Actual Price

Trend

1985-86

15.61

12.95

1986-87

16.02

15.96

1987-88

16.81

18.97

1988-89

19.45

21.98

1989-90

27.23

24.99

1990-91

27.38

28.00

1991-92

30.90

31.01

1992-93

31.00

34.02

1993-94

40.51

37.03

1994-95

39.90

40.04

Increase/ Decrease over 1985 Source

(155.60) (9.83)

Based on Annual Report of Co-op. Factories. Figures in parenthesis represents total annual increase.

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