TEA SITUATION

Evening Post, Volume CXI, Issue 98, 28 April 1931, Page 12

TEA SITUATION

GOOD AND COMMON SORTS

. The aggregate after-Easter catalogue of teas ; offered; in Colombo on 14 th. April amounted to; four million .pounds. Best Sorts'fell nearly: 2d per lb, medium grades; fell %d.to Id, commons declined from %d to Md . per lb. ' There was-practically no bidding by Australian .buyers, and this is believed to be the main cause of the low market, coupled; with'a catalogue of practically twice the usual offering. Messrs. Heath and Co., Ltd., Calcutta, report: "It is-difficult to view the future of tea with any material degree of. optimism. The United Kingdom stock at the end of January was .approximately at 296 million pounds, as-against a stock (also approximate) of; 283; millions' at the end ofJJanuary, [lSW-^-aTX increase .of 13 million pounds.' : ■;'. '':'.'. lt is.almost'incredible, supplies'at present being somuch in excess of demand,'that producers have not'yet formulated .any' definite scheme" with regard to restriction :in the; future. ■We are •given to understand'that^-with new areas shortly; coming' into/bearing, the already excessive, supplies are likely to; be considerably; augmented during; the'next few years. We cannot at the moment see from whence any.; additional demand can materialise. ' "India itself is perhaps the most likely ■country-;-from .-.which any appreciable increase in' consumption may be expected. Until their financial position improves considerably Australia will be unable to take a very much larger1 quantity of tea, whilst Russia is too uncertain a market even to speculate upon. They.: themselves are' reported to be planting out large areas of tea .in' the Caucasus,, which fact itself is not going to improve the general situation. That the position must eventually be righted is inevitable,-as no commodity can continue to. sell below the cost of production for a very prolonged period. The acceleration of this recovery, however, in our opinion.lies entirely in the hands of the producers. Gardens which produce good and fine quality tea alone have in any degree prospered, which fact supports the opinion held hitherto that there will always be a good demand for such produce, i . ' , _ "Nevertheless it must not be overlooked that the; present world, trade depression must tend to-create a larger: demand'for the lower-priced' article, and excellent tea value'may now be obtained by the public at extremely, low retail prices. In view of this it is more than probable'that the better grade teas will realise lower prices next season, and the present extremely wide margin between common and good tea will be narrowed considerably. The 'financial' resources of many low and medium quality gardens have been severely straiued during the past two years, and' a "further season of low .prices will be more -than a large number of companies can possibly withstand. Thus will, supplies become automatically curtailed unless some very prompt action be taken by the producers, to raise.prices before this can come about. Failing some such action, we can see no reason -for prices during the coming, season being any more remunerative to producers/