EXPERTS SPEAK

Mr. Aniruddh Chakravarty (Vice President Tea Marketing), TEA AUCTION LTD.

Q: It has been reported that Chinese teas are available in the Indian market. How do you think this will affect the already beleagured tea industry?

A: I don't think the Tea Industry is beleaguered. Producers making decent teas are rewarded well and the accent should continue to be on quality. As regards to Chinese teas' availability at throw away prices are concerned, ridiculous prices which are heard in the market, doesn't seem to be realistic, as Chinese tea brought in through official channels would attract a freight almost equal to the prices heard.

Q: It is widely anticipated the market this year will be even lower, than last year, especially from the post second flush period. What are your comments on this?

A: The price concertina would reflect a wide gap, between the good and the plainer categories. Levels would depend partially on the offerings and price levels in Mombassa and Sri Lanka amongst the major auction centers as regards export enquiry is concerned. Domestic market will however hold the levels of good categories.

Mr. Arun Majumdar - Pahargoomiah Exports

Q: What will be the export scenario for the next one month?

A: According to Mr. Arun MAjumdar, a thoroughbred exporter in bulk & packet tea: 'The traditional exporters are rather selective this year and are unlikely to operate with strength. Similar sluggish enquiry is foreseen from Japan & Germany. CIS & Poland are importing teas mostly thruogh third countries. Direct import is centered in Southern India due to teh price advantage. The usual U.K. buyers are likely to start operating on post second flush teas, but the volumes are likely to be very low as they are buying mostly from Mombasa at very competitive.

Mr. Ashok Sadhya, Vice President, Hanuman Tea Co. Ltd.

Q: In brief do you have any suggestions to improve the current auction system?

A: I we could squeeze the printing time from three weeks to two weeks from the date of arrival of the teas, this would reduce the interest burden on sellers, if the sampling cost could be reduced it would benefit sellers.

Mr. Somnath Chatterjee of Nestle India Limited.

Q: What are your views on the Indian tea market?

A: Undoubtedly going through a bad phase. When the market is so low it is bad for all concerned and not just sellers, the buyers too go through a rough time as with rapidly falling prices they have a hard time justifying their last weeks purchase prices.

Mr. Sushil Bagla (Managing Director) Hanuman Tea Co. Ltd.

Mr. Sushil Bagla had the opportunity of recently visiting Japan. Subsequently he went with a business delegation of the Bengal National Chamber of Commerce and Industry on invitation from the Government of China’s agencies. We are pleased to bring you teauction.com’s interview with Mr. Bagla. On Japan: “During my visit to Japan I visited Osaka, a beautiful city, one of the best in Japan. It is a very large commercial center including for tea. There are a few buyers of tea in Osaka. They are very selective and very cautions about quality. They are very particular about the chemical content of fertilisers used in the manufacture of tea in India. One thing definite is that they do not want to buy ordinary tea and are interested only in the premium segment. Concentration is on Orthodox teas but recently some of them are interested in high premium CTCs. Price is no criteria for them. In case they like the tea, they are prepared to pay any reasonable price. There are good prospects of developing tea trade in Japan. “On-China: The Chinese were extremely courteous and very helpful. In Trade and Industry China has grown tremendously in the last 15 years though there has been a little slow down in the last two years. They are hardly interested in importing anything from India but are interested in exporting any and every commodity in bulk (to the tune of numbers of containers per month) including tea. They mainly manufacture Orthodox tea, which is of poor quality, but recently they have started manufacturing CTC, which is of extremely poor quality and has hardly any flavour. They have green tea and flavoured teas for mass consumption, which is of course not very much liked in India. These flavoured teas carry a lot of scent of flowers like jasmine, rose etc. Though there is plenty of scope of trade between the two countries, it cannot be a one-way traffic. They are highly appreciative of India being a super power in the IT industry! Though China has a language problem the government has now made it compulsory to study English language.”

Late Ranjan Mukerji ESQ. (GM Packet Tea), Eveready Industry India Ltd.

Q: Why are the present markets depressed in North India and South India?

A: Current markets are depressed because of oversupply particularly in the case of South Indian teas. The dip in exports to Russia from South India has affected North Indian prices as well, primarily because trade sentiment has been bearish resulting in lower pipeline stock hence lower demand.

Q: Packet Tea Sales – are they sluggish or are brands such as Tez and Premium Gold taking time to build up? Where do you placed yourselves Vis a Vis HLL and Tata Tea?

A: Market is sluggish. Sales of Tez tea have grown considerably in the last quarter. Premium Gold is the same as last year. We are No.4 in the market. HLL and Tata are ahead.

Q: What is your forecast for the packet tea market?

A: I would predict a growth for the packet tea market rather than a decline. There is a lot more marketing inputs for packet teas this year.  My opinion is that prices are not inclined to fluctuate relative to last year.

Mr. Chrisantha Perera (Chairman), Forbes & Walker Group (Sri Lanka)

Q: What do you feel are the prospects of the Internet Vis-à-Vis tea?

A: I am strongly of the view that Internet marketing has come to stay and no commodity can avoid the reality of making the product available through this new medium. Therefore the sooner the global tea industry gears themselves to internet marketing in addition to the established channels such as the auction system the better it would be to all concerned i.e. producer, broker, buyer and right down the supply chain to the ultimate consumer.

Mr. Manoj Sharan (Tea Consultant)

He has been with the tea industry since the last 15 years out of which he spent 8 years as a broker with J. Thomas & Co. P. Ltd. Since the Mid Nineties, he has been an exporter of bulk tea to Europe and packet tea to Russia. He is also a manufacturing consultant to tea estates and a buying agent.

Q: Why has the export market to the CIS countries deteriorated so much?

A: The main reason for exports dwindling to Russia is because that country is in dire straits economically. The rouble has crashed from the 5,500-6000 levels last year March to the 25000 levels.

Q: What can we do to improve the situation and bring it back to the 1996 tea industry scenario?

A: However there is definitely a silver lining. Oil prices have shot up and held on for quite sometime now which is helping Russia, which is oil rich, tremendously. One positive step that the Russians have taken is the nationalization of import duties on bulk tea vis-à-vis packet tea. Our government needs to take more aggressive since with regard to exports of tea to Russia. That can improve the situation.

Q: What are the areas we are lacking in?

A: We have to be more quality conscious about the teas we offer abroad, but at a more competitive price and look at newer ways of selling tea, like online auctions.

Mr. Noor Mohamed GENERAL MANGER (TEA) PARAMOUNT TEA MARKETING (P) LTD., Coonoor

Q: Do you think the Internet is a good medium to organize auctions, or what do you think is the future of online auctions?

A: Internet is fairly a good media to organize auction however certain particle difficulties may be faced initially such as sampling, registering of sub-buyers (particularly in South) prompt realization etc.

Mr. K. M. Angelos, (Senior Manager - Tea Buying & Quality Control), Tata Tetley Ltd. 

Q: Do you think the Internet is a good medium to organise auctions, or what do you think is the future of online auctions.

A: Internet is a very good medium to organise auctions. It can be considered as a revolution from the traditional tea auctioning system where buyers meet at a place and exchange bids. However, the on line system of auction has a serious drawback - the understanding and bonding relationship between buyer, broker and seller will be forever missing. The information that one could collect by meeting trade people on a weekly basis is something tremendous and the market information update is wide and transparent in the traditional system. I had the opportunity of some one from your organisation taking me through the on line auction system. The brain behind designing the system needs a loud applause. It is fantastic! The on line system to be successful, a great deal of awareness is required to be created among the users. In addition, I am sure, once the system in place, fine-tuning can be done on an on going basis depending on buyer requirements. Will the small buyers be interested in buying teas through Internet, as they may not be having a computer? It's for sure computer for any business is necessary, though. It is only a matter of time. The agency buying will reduce to collecting D/Os and dispatches. In the end, brokers can dispatch loads directly to buyers designated locations with support from Sales Tax Department by amending rules accordingly.  

Mr. Kunal Ganguly (Senior Executive) A.W.Figgis & Company (P) Ltd

Q: What do you feel about online auctions?

A: On line, auctions are the best medium of the future, & all of us (Buyers, Brokers & Sellers) should be tuned for that from now.