TEA AND PRICES

New Zealand Times, Volume L, Issue 11422, 19 January 1923, Page 7

TEA AND PRICES

CAUSES OF THE RISE INSUFFICIENT LABOUR AND UNFAVOURABLE WEATHER. CONSUMPTION INCREASING. Supplementary to the article which appeared in Wednesday's "Times,'’ a reporter interviewed the principals of the leading tea importing firms in Wellington, with the object of ascertaining the latest information available, and learned that the causes of the steady advance in the price of ten that has taken place over the past twelve months — but only severely felt during the past three or four months—have been: Firstly, the below normal output of tea in the three chief producing centres—lndia. Ceylon, and Java—which reduction of output has been caused: (a) By finer and more careful plucking on the part, of the estates; (b) The difficulties experienced in obtaining sufficient labour to successfully deal with the crops, brought about by the general unrest existing there, and more especially by the amount of work offering in other directions whioh has offered the coolie profitable work nearer bis home: and

(c) The unfavourable weather conditions that have ruled in the tea districts for the past twelve months. Secondly, the continued and eversxpanding popularity of tea as a beverage. In the United Kingdom the consumption has been steadily increasing, and whereas a few years ago the con■umption was about 61b per capita, it now is in the neighbourhood of 91b, showing an increased consumption of 80 to SO million pounds in that market alone. In addition, other countries, such as France and America, and even India itself, are consuming more tea. YEAR’S SUPPLY PURCHASED. The balance, therefore, of supply and demand has reached a point where stocks have been reduced to a minimum and large distributors of tea in Great Britain, fearing a dislocation of their trading by being unable to secure their requirements through the usual channels, namely, the open public auctions, have contracted for the total outputs of a great many of the leading estates, which makes, a further shortage for those drawing supplies through the usual auctions. Many of these forward OMxtracts have been made at a price higher than has ever before been known in the trade, and quite 50 per cent, higher than prices ruling, say, four years ago. The *'T.imes” reporter was also informed that the Indian season is over, and will not reopen till next July. The last picking was considerably short of expectations, and as the Indian output approximates 60 per oent. of the world’s tea supplies, everything hinges on the bigger or smaller crop received from that market. The world’s tea consumption amounts to about 695 million pounds, of which the United Kingdom takes 415 millions, U.S.A. 90 millions, Canada 40 millions, Australia 36 millions, and New Zealand nine millions. In 1932, the production was about 40 millions short of the estimates.

LOCAL ADVANCES NOT COMMENSURATE:

It was not definitely known what the Indian production for 1922 would be until well into September, and consequently no apprehension was shown by ths trade until it became known what quantity of tea India would he able to market. Although general firmness existed up to that time, the acuteness of the position was not* revealed until the September crops were known, and the estimated crops for the remainder of the season, October-November, were forecasted. Since these figures became known there has been a steady advance in all producing markets. From 1903 to 1922, prices rose on the Colombo market from 38 to 72 cents a lb, the only fall being in 1920, when it fell from 55 to 42, and then jumped to 72, so it is obvious that the advances whiob have been made locally have not been commensurate with the advances on the Colombo market. These figures, it was said, explain ta some extent the reason for the advance in retail prices that has taken place in New Zealand in recent years, but other costs, such as increased duties, higher all-round packing and distributing charges, must be borne in mind also. NO NEED FOR APPREHENSION. So far as New Zealand is concerned, importations of tea during 1931-22 were on the light side, and stocks held by consumers, retail distributors, and wholesale merchants are undoubtedly low, consequently local prices must be affected at once by the prices ruling at the producing centres. Although no possibility of a decline in prices for several months can be looked for, there need be no apprehension that the New Zealand tea merchants will not cater for their consumers’ requirements, and the strong competition existing in this highly-specialised trade will prohibit any exploitation of the public.