Thursday, April 4, 2013

Marketing of Teas in India : Saga of Complexities and Expertise


The process of growing and manufacturing tea and its subsequent marketing involves complexities and distinguishing factors not associated with any other commodities. Options are limited in the business of tea at every stage and this in turn brings some of the constraints necessitating careful attention.
Tea is a perennial crop. Newly planted tea bushes require at least three years to attain maturity and start yielding green leaves for manufacture of ‘made tea’. The life of the tea bush is more than 100 years and the economic age of tea bush is also around 100 years although it depends upon the type of tea plant, climatic condition and the care received from the planters during the life time. Therefore tea grower cannot turn to crop rotation when the prices are weak nor can he increase output in a short time to take advantage of higher ruling prices.

Tea is also a perishable goods and cannot be stored for indefinite period without affecting the quality. So decision of the tea growers to regulate the marketing of tea within six to eight months from the date of manufacture to fetch maximum price is an important one. Although tea can be stored with proper arrangements for a period of six to eight months, the general intention of tea growers is to market their teas within four to six weeks from the time of its manufacture in order to recoup the liability towards cost involved in the tea field, estate factory or in trading factory. Only financially sound tea producer/manufacturer is perhaps able to take risk of delayed marketing of their produce and can avail any possible opportunity arising out of upward price movement in the tea market.
There are two well defined stages in the marketing of any product including tea. These are Primary and Secondary. In the primary marketing, teas grown in the tea estates reaches to the traders of either domestic or of importing countries. In the secondary stages of marketing teas from the traders reaches to consumers of either domestic or overseas.
Primary marketing
As already mentioned, tea is a commercial crop cultivated on a plantation basis. Unlike cereals, negligible fraction of the tea output is retained for consumption by the planters at garden level. So that almost entire output at the garden level is sold. The tea planter has the following four options to dispose the output through sale.
i) Sales through Indian auction.

ii) Sales through overseas auction by sending teas on consignment basis.

iii) Sales as ‘direct export’ to the importer of importing countries.

iv) ‘Ex-garden’ sales.
While sales (ii) and (iii) earlier mentioned are exclusively for exports, sales through (i) and (iv) are meant for domestic consumption as well as for exports. At present teas from garden level are marketed either in bulk form or in packet form. While earlier mentioned four options are available for markets of tea in bulk form, only options (iii) and (iv) are available for marketing of packet tea by the tea planters from the garden level.
Secondary marketing (with reference to India)
Indian Traders who purchase tea through Indian auctions or directly from the tea planters have the following options:
a) Export in bulk packages in original form and/or export in bulk packages in blended form.

b) Export after further processing as tea bags and/or packaging in consumer packs.

c) Sale to Wholesaler/Retailer in loose form to reach Indian consumers.

d) Sale to Wholesaler/Retailer in packet form after packaging in consumer packs to reach Indian consumers.

We at Golden Tips, as leading marketers and retailers of premium quality Darjeeling Tea since 8 decades in India, give utmost importance to the above marketing processes with an endeavor to bring the best teas to tea lovers in India and all over the world at correct prices.

Source : Tea Board of India

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