Tea Biz
Tea Biz

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Tea News and Biz Insights - November 12, 2021

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HEAR THE HEADLINES – Ekaterra Tea Pledges to be Net Zero at the UN Convention on Climate Change | Grocery Shoppers Say they are Willing to Pay for Sustainably Produced Foods | Inflation Demonstrates a Troubling Persistence | NEWSMAKER – Prabhat Bezboruah, Chairman of the Tea Board of India | FEATURES – Tea Biz this week travels to India where the traditional tea plantation model is under regulatory scrutiny. The union government there is redrafting legislation from the 1950s to gradually loosen regulations, abandoning requirements that previously limited who could grow tea and where it could be grown. In Part 1 of this extended Newsmaker Interview, Aravinda Anantharaman speaks with Tea Board of India Chairman Prabhat Bezboruah to better understand the current situation and the economic and societal forces driving change.India Experiences a Very Bad Tea Year | Aravinda Anantharaman |The Tea Board of India has been in the news recently for various reforms that seem to be underway. We spoke to Prabhat Bezboruah chairman of the Tea Board of India to understand the changes that are brewing with the board as well as his views on how the Indian tea industry is faring this year. Bezboruah has been chairman since 2017. He is the first tea planter to hold this position.Next week, in Part 2, Bezboruah discusses high-level talks on transferring regulatory oversight of India’s Tea Industry from the Ministry of Commerce to the Ministry of Agriculture and Farmers Welfare

The tee Biz podcast delivers a recapof the week's major tea news headlines, with commentary and cultural trends. Hostedby Dan Bolton, Te Biz is the voice of origin for tea professionals andenthusiasts world wot think of us as a digital caravan of storytellers, bringing authentic, authoritative and exclusive stories to you weekly from the tea lands. Hello everyone, here are this week's head lines. A COUTERA TEA PLEDGES TO BE NEAND ZERO at the UN Convention on Climate Change. Grocery shoppers say they arewilling to pay for sustainably produced foods and inflation demonstrates a troubling persistence. Morein a minute, but first this important message. What makes a Perfect Cupof Ceylon tea? The Perfect Cup is from the tea businesses that ensure theprotection of all the children living within their tea estates. We Salute Kailani Valley, tellawackilee, Boga, Wanthalawa, Harana and Elyptia tea estates. Support Savethe Children Sri Lanka, Echteritia Unileavers no really created division of legacy tea brandsand the world's largest tea supplier pledge this week to become Carbon Nett Zero bytwenty thirty. The division, led by CEO John Davidson, announced several climateand sustainability goals, including a commitment to a hundred percent sustainably sourced tea's,a switch to all plant based tea bags and recyclable, compostable or reusable packagingby two thousand and twenty five, along with the adoption of regenerative agricultural practicesfor raw materials sourcing by twenty thirty. Greenhouse gases have reduced by sixty sixpercent since two thousand and ten, said Davidson, who promised a further reductionto eighty percent from the two thousand and ten baseline. Akutara owns Lipton,pg tips, tous Oberbond, lions, PUCA and red rows, leading teabrands in fifty eight of the hundred and ten countries where it's portfolio of thirtyfour products are sold. The division employs one million people in twenty one countries, earning two billion euros annually, about two point three billion in US dollars. Quote. Real leadership today means mobilizing and transforming the entire industry for positiveimpacts. That Davidson the announcement benefited from global attention. On Cop Twenty Six, now winding down in Glasgow, Scotland,...

...where the US in China announced anunexpected climate agreement, Addington momentum for Change, delegates are negotiating and acceleratedcarbon emissions cutting schedule and financial aid to developing countries. Scientists stress the importanceof keeping global temperatures within a one point five degrees Celsius target. Copious amountsof tea were visible during the event. At one point, protesters dressed ascaricatures of world leaders staged a tea party theme performance where they were served burntAlaska and Arctic Melt. Business inside, there was a greater sense of urgencyduring the two weeks summon. Quote. Everyone knows what is at stake forthe future. We have no choice but to rise to that challenge and quote. COP President Alek Sharma told delegates CLP twenty six promises a renewed commitment toclimate change in the most important response since the Paris Agreement. Grocery shoppers saythey are willing to pay for sustainably produced foods. Are Consumers willing to compensatesuppliers for the cost of sustainable production? Yes, according to a global panelof eighty six thousand consumers conducted by you gov. quote, sustainability, bothin terms of production and consumption. It's top of mind from any consumers globally, according to you GOV, as governments worldwide sign accords to battle climate change, reduce carbon emissions and look after the planets health. Quote. Consumers arealso inclined to playing their part in helping preserve the environment and are willing toback their personal values with their spending dollars and quote, according to you gov. You gov's international FMCG CPG report two thousand and Twenty One compares shifts andconsumer preferences and consumption patterns in seventeen countries when queried on their willingness to paymore to address environmental concerns. Only responses from persons identified as mainly or partlyresponsible for grocery shopping for their household. Grocery shoppers were taling globally. Threeand five. German grocery shoppers, sixty percent. We're willing to pay moreto address environmental concerns. Next were US grocery shoppers at fifty eight percent,closely followed by UK grocery shoppers at fifty seven percent. More than half ofgrocery shoppers in Australia, fifty three percent, showed a similar inclination. In Japan, feelings are mixed. Only three...

...and ten grocery shoppers agree with thestatement I don't mind paying more for products that are good for the environment.Forty two percent of this audience neither agreed or disagreed with the stamen business insightthe youug panel indicated than in the UK and the US, Gen Z andmillennial grocery shoppers were far more likely than older age cohorts to say they wouldpay more for sustainable products. Dismissed initially as transitory, economists responded with concernthis week as an increase in the US cost of living touched a thirty yearhigh. Inflation increased to six point two percent in October, growing in apace not seen since one thousand nine hundred and ninety according to the US Bureauof Labor Statistics. Inflation was more subdued in the European Union, at fourpoint one percent last month, up from three point four percent in September.US Food prices added far less to the overall cost of living than energy costs, for example, which rose by thirty percent in the past year, butfood and FLA Latian, has spiked globally. Hunger and malnutrition are on the risedue to weather related flooding and droughts and more expensive inputs. Bloomberg rightsthat the United Nation Index tracking staples rose three percent to a fresh decade highin October, threatening even higher grocery bills for households that have already been strainedby the pandemic. Tea is plentiful. Rising prices for boat transactions are blamedon energy costs, shipping logistics and expensive ground transport, not scarcity. Thecost of labor climbs steeply in two thousand and twenty one at both ends ofthe supply chain, along with costs for manufacturing packaged goods. In the tealands. Worsening hunger is a concern as Africa and India experience multi year highs. National governments and aid groups report the poorest families are struggling. The WorldBank reports that global poverty had been declining before covid nineteen, quote as aresult of long term scarring. We estimate it by two thirty five hundred andeighty eight million people could still live in extreme poverty, and additional fifty millionpeople compared to pre covid nineteen estimates and quo business inside market research firm IR I products C P G inflation will be eight percent in grocery during thefirst half of twenty twenty two, tapering...

...to four percent in the second halfof the year. In the US markets, the current inflation rate is five pointthree percent for package goods. According to I R I, consumers pulledback from purchasers, leading to a decline in unit sales and volume when pricesrise five percent or more. According to I ri I, Arab and Annand Theraman in Bangalouru reports on this week's India tea auction prices. India teaprice support for the week ending Sixth November twenty twenty. One in use thisweek is the invitation to Indian tea companies to participate in Iraq's first t festival. Iraq was a major market for indindi until two thousand six, when thegovernment of Iraq procuote from India under the UN Food for oil program in Portof tea stood at around eighty million kilos, with nearly half coming from India.Today, Sri Lanka is a major supplier of t to Iraq, sothis invitation from the Baghdad Chamber of Commerce comes as a boost at a timeand Indian exports are struggling, even as competition from Kenya and Sri Lanka intensifiesin markets. This week Kolkata auctions so would demand for all Tis. MiddleEast was active Orthodox tea, while Hindustan Unilever was active for dust. Fordagling tea, prices were not significantly different from the previous week. Kahati alsosaw good demand, with major blenders active for both leaf and dust. Priceswere higher by seven to ten to piece from the previous week. Siliguri alsosaw better prices this week compared to previous week. In the south, therewas no sale in coimb with our auctions this week in coaching, prices weremarginally higher than the previous week. Export us to the CIAS and Middle Eastwere active. Orthodox leaf. fannings sold well to export US and teabag manufacturers. In connude, ninety percent of the CTC leaf for sold, with majorblenders being the main buias. Orthodox leave also saw good demand, with holyof grade seeing marginally higher price this week exporters were active Orthodox leave by CTCdust. So major blenders active. One hundred and twenty four kilos of greentea and offer was sold, averaging at piece two hundred and eighty one perkilo. Now or word from our sponsor. H Trade understands that a successful teablend goes beyond the creative fusion of appearance, a Roma and flavor.Are Multi Award winning product development team is passionate about converting natural ingredients its sensoryexperiences that customers grave. Every recipe is formulated with a commercial backbone of dependablequality sourcing, with a pricing structure that's supports a safe, regulated, profitableand scalable plant. Q trade meets every brand's retail, food service and ecommerce need. For more information, visit our website. Que trade t'scom TeBiz this week travels to India. Whether...

...traditional tea plantation model is under regulatoryscrutiny. The union government there is redrafting legislation from the s to gradually loosenregulations, abandoning requirements that previously limited who could grow tea and where it couldbe grown. In part one of this extended newsmaker interview are Vinda and NTheo man speaks with the tea board of India Chairman Probat Besbura to better understandthe current situation and the economic and societal forces driving change. The t boatof India has been in the news recently for various reforms that seem to beunder be we spoke to probout bies Bodowa, chairman of the tea boat of India, to understand the changes that are brewing with the board, as wellas his views and how the Indian industries fairing this year. Probat base Bodoihas been chairman since two thousand and seventeen and as a Firstye Planta to holdthis position. How has two thousand and twenty one been for the Indian teaindustry? It's been quite bad. Two Thousand and twenty, despite the lockdownand despite the fact that the tea gardens were shut for a while, turnedout to be a pretty good dear for tea. When supply is restricted,tea prices go up. This year, Indian volumes have recovered and will almosttouch the two thousand and nineteen levels, and demand is sluggish. I personallydon't believe that demand has contracted over the COVID epidemic, but it's sluggish,it's you can say stagnant, maybe one percent of so higher. And nineteenwas a bad year for P so twenty one will be a pretty bad year, especially for the south Indian industry, where prices are lower even than twothousand and nineteen. Rising costs and slowly in exports. The primary reason,the primary reason is that volume output our crop has bounced back to the twothousand and nineteen levels. Remember, we had record exports in two thousand andnineteen of two hundred and fifty five million kilo. Last year they were abouttwo hundred and ten of fifteen or this year they're likely to be lower eventhan last year, the whole logistics chain having been broken in various pieces,various reasons, indeed being being uncompetited. Canyan teas are still available to deeperthan equivalent Indian teas. I mean south India doesn't compete with Kenya. Basicallyyou have consodox exports from south India which are decent. They compete with Sreeluncan export the south Indian citcs that are that are much lower in the inthe value chain than than millions. But...

...north Indian CITYC exports are going tobe very badly affected because Kenyons are available in mark super well. The domesticdemand is also sluggish. Rice down every way will grows carry forward to youagain this year like two thousand and nineteen? They will be. They might besome carry forward stock because exports are going to be much lower than twothousand and nineteen. But you know in nineteen we made one thus three hundredand ninety five million kilos, one thousand three hundred and ninety million kilos andwe exported to fifty or fifty five million killows. So if our exports hadbeen at two thousand and nineteen levels, you wouldn't have seen any carry carryingfor this year. India's hospitality industry has still to recover from the pandemic.What's impact on tea? Hospitality is a fairly large chunk of demand in India. Hospitality includes your tea stalls, roadside tea stalls. You that that's abig demand, but the total out of home demand fourteen India is only aroundfifteen percent of the total demand. In home use. The drinking of teahas increased to offset some of the drop in in w edge. Oh Idon't buy the story that Indians are drinking less tea in two thousand and twentyone then they were even in two thousand and nineteen. I don't think you'rereally going to see a very bad last water as far as demand is concern. I don't know about prices, but I think the demand will be there. You've spoken about the need to liberalize the market. What would you sayis the current alliance and auctions surprise discovery platform? What needs to change?Well, I've always thought that the auctions are a good place to sell yourtea, provided it's the only place to sell your ty you you can't havea system which acts as the primary price discovery mechanism, that's the auction andthen thing, and expose it to manipulation all kinds of you know there's noovert collusion among the main buyers because you know they are companies which are boundby very strict ethical codes and and they do follow those codes. So Iwould hasten to dispel the notion that there is any overt collusion between at leastthe a big boys, so to speak. In any auction there's what's known asa demand multiplier. Even the biggest boy to get a million kilos oftea, for example, needs to bid for two and a half or twoor two and a half million kilos of tea because they don't get every lotthey bid for. So if you take...

...away demand from the auction, ifa buyer has a totally demand requirement, annual demand requirement of Sayer, fiftymillion kilos and you permit him to buy thirty million outside the auctions his thelevel of competition in the auction will be affected not only for the thirty millionthat he doesn't buy, but another forty or fifty million that he would havehad to bid for in order to buy that thirty million. So it's it'sactually a no brainer that if you have parallel systems running, even if there'sno word collusion, you'd be weakening the auction. So therefore the auction shouldnot be the price parameter, but it is. So I don't believe thatat your system can survive. Now we need to sell fifty percent about easein the auctions, but buyers don't need to buy fifty percent of their perfusesin the auctions. So it's all it's a total heart part I have broughtup the shoe repeatedly at the tea board. Now they have Maha. They wonsupport in hand, even that is being implemented very slowly, but Iwould want that. That's not a panacea. That will not be a panacea unlessyou ensure that a hundred percent of tea is sold through the auctions.If you can't do that, I feel that the government and the teaboard shouldwithdraw from the auctions. The brokers who sell tea on behalf of the producer, to the bias in the auction brokers can organize their own auctions. Rightif you know that won't be a universal barometer. Price parometer would be likeany other. Say they would be competition. The market, marketing of the theprimary marketing of tea, would be liberalized in a way that would benefiteveryone. The alternative way, I told you before, and I'm repeating myselfmany times, is have everything in the auction, the hundred percent of you. How can the plantation model state relevant in these changing times? Even asa small tigrowth community is growing, the organized sector today struggling because it haslow productivity, investment, large scale theft and malpractice and an inability to tocarve a niche out for it self. There are companies, even in todayscenario, where small growers have a cost of production which is half that ofthe organized sector, or maybe even less. There are companies which are doing wellbecause small growers, the way they are set up and the fact thatthey sell their produced to bottly factories, they cannot make very good teas.There are always exceptions. There are some bottlely factories that by only the bestquality greenly from small growers. There are...

...small growers who plucked very well.So there are exceptions, but the bulk, the general trend in the small degrowersector is that their quality is not as good as the organized sector onan average. And there are there are states in the organized sector that makessuperdi teeth. The cost of production is much higher. But especially this yearthey are getting huge premiums. I would like to bring to your attention thata medium Assam today is selling at a hundred eighty rebews a Killo, ahundred eighty two, maybe two hundred Aube a Killo. The best is fourhundred plus. So you have a premium, quality premium of two hundred plus.And let me tell you, the cost of production differential is not twohundred. Therefore, people who are who aren't focusing on quality, and I'mtalking about really, really good quality, they're going to lose all this.Yet they will lose out to people who are for goesing on that kind ofquality. I suppose that's the way to go. If you if you dogo that way, you would also there would also be spinoff benefits for everyonebecause your volume will come down. It would be of interest to you thatthere are some areas of a slam where large scale theft and Decoitye of greentea leaves take takes place, and I've been observing that many of the teacompanies are the majors, the team majors as you would call them, whohad to divest their units. They the units that they're getting rid of andthe bulk of their their assets are in the areas where there's green leafs Haftis rampant and I feel for them because you know, it's re leaf issold to people who buy there is no you know, there's no certificate oforigin. In the case of greenly. If you have a bottly factory andsomebody brings two trucks of fairly acceptable leaf to you, he will buy you. Don't ask where did you get this problem? Something being done about this. The leaf has been stolen from the Composite Gardens, the estate gardens.The people who are doing the stealing are local, local people, and thegovernment is doing its best, you know, to help. But the it's endemicin certain area. I have I have a sneaking feeling that one ofthe big reasons for Maja's having problems in the units is this. I startedby saying that's multi girls can produce the leaf at half or less the costof production of God's gotten but there are ways of handling creating these markets.Where of them? But if you have so many Dident bestows on you andone of them is you know, then...

...can you fucking in part two,Probab Biz Bura Discusses High Level Talks on transferring regulatory oversight of India'St Industry fromthe Ministry of Commerce to the Ministry of Agriculture and Farmers Welfare. Intrigued bywhat you heard in today's podcast, would you like to learn more from ourglobal network of TB is, journalists and t experts? Remember to visit theTe Biz website from more comprehensive coverage. That's wwwt Biz bizcom. Thanks forlistening. Farewell Till Next Week.

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