IMPORTS OF TEA

Gisborne Herald, Volume LXVI, Issue 20078, 26 October 1939, Page 4

IMPORTS OF TEA

INADEQUATE FUNDS TRADERS PERTURBED PRICE RISE FORECAST ADVANCES ON MARKETS (Per Press Association.) AUCKLAND, this day. Consternation is being felt in the tea trade owing to the apparent inability of the Government to provide sufficient funds to finance tea imports in the customary manner. It is estimated that the delay caused will cost New Zealand from £75,000 to £IOO,OOO more for exactly the same grade of tea than it would have cost had the normal procedure been adopted. For the past three months importers have been endeavouring to secure more workable arrangements from the Government, but without success. Overseas prices have risen by 9d per lb. since the outbreak of war and are still advancing. Although it was inevhable that the rise would be reflected in New Zealand, the effects would have been delayed if the normal credit facilities had been available.

“The people in New Zealand must be prepared to pay about Gd per lb. more for tea in the near future,” said one merchant. “The action of the Government is responsible for the increase being necessary so soon, as if credits had been available we could have made provision to a certain extent for the rise in overseas markets.” Weekly Auction

It was pointed out by another importer that as the Government had agreed to allow tea to be imported up to the value of last year’s figures it might appear that tea packers were iu a privileged position. This, however, was not the position. Consignments of tea for New Zealand are sold by auction each week in Colombo, a cash settlement being made at the close of each auction. The only basis on which tea import licenses have been issued so far is for payment in from six to nine months. This is unacceptable to shippers, who are finding it extremely difficult to secure sufficient supplies for other markets for which prompt payment is guaranteed. Licenses are granted on a sterling basis. As no additional licenses will be granted, every increase in the purchase price means that the packers are faced with the problem of doing less turnover on the same fixed overhead. The packer apparently can secure permission to increase the price of his tea by the amount of the rise in his cost per unit, but is not allowed to take into account the increase in overhead charges caused by the reduction in turnover, and he is therefore faced with another impossible position.”