WHY TEA IS DEAR

Dominion, Volume 13, Issue 104, 27 January 1920, Page 7

WHY TEA IS DEAR

FURTHER INCREASES EXPECTED. To tell the housewife that she' is now paving about 2s. Gd. per lb. for good tea because- the value of the rupco in India has increased from Is. 4!d. to 2s. o|d. would convey little satisfaction to her, fiavs tho Melbourne "Argus." Her very natural reply would be that sho had nothiii'.' to do with rupees; that all sho wanted was srnod tea, and that she could not. understand that, while formerly sho only paid about ]». Gd. per lb., to-day she had to pay Is. per lb. more.

The urincipal reason for this is that, owing to the price of silver having risen to over os'. an ounce, tho rupco in India, which formerly was worth about Is. 4d., U now worth nearly 2s. Gd: A homely illustration will simplify matters. The Australian merchant buys tea in India and Cevlon. and pays in rupees, and has In send money from Australia to meet his purchases. Insteal of sending, as formerly, about Is. Id. for a rupee's worth of tea. ho has now to send nearly 2s. Gd., or 80 per cent, more than before. Sn his tea costs him, in exchange alone, about 80 per cent, moro than it formerly did. and the greater portion of his increase has been passed on to the consumer.

Australia enjoys the distinction of being the greatest tea-drinking commonitv in the world. During the financial vear 1918-1919 the importations were over 45.000,0001b.. representing a consumption of about 91b. by each person. Taking tho a vera so household as consisting of five persons (the usual calculation), each family would during the year use about 15lb. of tea. Nearly three-fourths of all the tea imported in Australia in the yenr that has been quoted came, from lndi.\ and Cevlon, and.was, consequently, affected as to price by the rate of exchange. An idea seemed to prevail formerly (lint China was, to a great extent, the world's tea provider. Only about one-fortieth of the tea consumed in Australia is grown in China. If it were not for India and Cevlon the Australian markets would practically he ba-rc of ten supplies. Whv. it. may ho asked, should there be a prospect, of the, price of lea still becominc dearer? Irrespective of the question of exchange (the value of tho rupee), other influences . are nt. work which may, it is explained, have a serious effect as r far as the consumer is concerned. The war. is credited with having brought into being an entirely new class of tea drinker. During the hostilities tea became, it is stated, a popular drink with soldiers, and the effect of this will, it is anticipated, be n substantial increase in Hie demand for tea. Of this there arc stated to lie already unmistakable signs. Tea proline Hon iii liidin has also, it is averred, not kept pace with the increasing demand, witli the consequence that supplies are becoming scarce. A curious- point with regard to tho tea Imsiness. in Australia is said to be Hat, in the capital cities, low trades of lea are of very difficult salo In the districts where workers are in a majority, the lower grades arc practically unsaleable. The principal demand lor these is in the country districts. Fears aro understood to have been expressed fliat a' considerable advance in retail-prices could very shortly be expected. Some talked of tea going up to !U. Gd. or 4s. per lb. Tlrs is ridiculed bv the trade, but, at the same time, the opinion is expressed that heforo very ion" an advance of about 3d. per lb. mnv not be unlikely. The average consumption of a household being about 4."1h., the advance alreadv recorded means nn addition lo the housewife's budget of £i ss. per vear for tivi alone; a considerable item where limited 'ncomes are cimei.niiKl. But the Ami!i" , ian r'irc shor.ld not <mmil.tii>. She is miHi better oil" lliiiu her English sister, who hai lo uav Is. Customs duty on every pound of tea she buvs. Since federation, tea has been on the free list in Austral a. At one time a duty was contemplated, both on tea and kerosene, but both articles were placed on the free list, in the interests chiefly of the workers. If a duty had been imposed of only 3d. a pound a revenue of a miai'trr of a million would have resulted annually. Now tea is costing tho' community ,£1,000,000 moro ft vear than formerly, and chiefly because- Iho value of the rupee hns increased.