THE TEA MARKET.

Manawatu Herald, Volume XLII, Issue 2127, 13 May 1920, Page 4

THE TEA MARKET.

WHY PRICES ARE HIGH

DEARER NATIVE LABOUR

Mr G. A.' Ginn, tea broker, formerly of Colombo, has just returned from India and Ceylon. When questioned by a Post reporter on the subject of tea, in which he is keenly interested, Mr Ginn advised that there is little likelihood of any appreciable decline in the price: the tendency is rather the other way.

Everything 1 connected with the industry Ims advanced in price, but chiefly the cost of labour, ihc whole of- the field work, including weeding, pruning, plucking, and a certain amount of the factory work, has to be done by hand, and each estate must have a large labour force. Coolie, wages have advanced about thrice the amount as compared with a few years ago. At the prices now ruling for tea —which before the war would have been considered quite satisfactory from a producer's point of view—there is practically no profit to the grower, and in order to rectify the position outputs on many estates are being restricted.

Until quite recently one pound sterling purchased 15 rupees' worth of tea; ‘how, owing to higher exchange, one pound sterling purcliase.-> only eisrht to nine rupees worth, which, added to the higher cost of freight, packing charges, etc., means that tea is coiling blenders in Row Zealand just about double what it did two years ago.

The total withdrawal of Russian buyers liberated about 100 to 150 million pounds for other markets, hut in every country, and especially in India itself, the consumption of tea is increasing. In Great Britain alone the 1910 figures reveal the fact that the per capita, consumpti<tn has increased two pounds compared with 1910. America and the Continent of Europe are also consuming more and more tea. each year, and the beverage is becoming increasingly popular everywhere. So long as Russia continues closed to trade the balance of supply and demand will he just about maintained. but once that market again becomes an opera!or there will be a shortage, and prices may soar 1 to any limit.

With the exception of Australia, where tea is admitted tree ol dut\. New Zealand tea drinkers receive their supplies at a lower price than any others, and the standard of quality demanded by the public here is very high. During the past lew months there has been a tendency on flic part of small traders to place before the public a I<>v quality of tea in order to be able to sell at a lower cost, limn the established brands, the. purchasing of which is really false economy, as the ten does not give the same satisfaction, nor does it go so far. Good tea is still the most economical, and by far the more enjoyable. IVhen Mr Ginn was in Colombo in January the price of a standard tea suitable for the Yew Zealand market was GG cents per pound, plus IS cents, for bringing it down. Exchange was then Sj rupees to the £l. The landed cost in New Zealand would be equivalent to 2s per pound. Then exchange went up and the rupee was wort h2s l.Od, i hat was in February. The priee of the tea in question in Colombo tell 1 to oG cents per pound, but, even so, it still costs (with the rupee at 2s 10d) 2s to land in New Zealand. Very little lea came in at, that price, and people held off buying. The exchange is now back to 2s 5d (.or the rupee, so that the tea costs not less than Is 9d to laud. In Australia the situation is that very heavy stocks were bought on a rising market. In order to force business and to reduce those stocks holders have made concessions in price on a few linos, and that at rates considerably under the cost of importing, even on to-day’s basis. There was every indication that the price of tea would hold up, at any rate for a long time to come, and this was attributable to increased cost of production and greatly increased consumption in all countries of the world.