WHY TEA IS DEAR

Wanganui Herald, Volume LIII, Issue 16036, 29 January 1920, Page 6

WHY TEA IS DEAR

further increases expected,

To tell the housewife that she is now paying about 2s 6d per lb for good tea because the value of the rupee in India has increased from Is 4j,d to 2a s§d would convey little satisfaction to her (says the Melbourne Argus). Her very natural reply would be that she bad nothing to do with rupees; that all she wanted was good tea, and that she could not understand that, while formerly she paid only about Is 6d per lb, to-day she had to pay la per lb more. The principal reason for this is that, owing to the price of silver having risen to over 6s an ounce, the rupee in India, which was formerly worth about Is 4d, is now worth nearly 2s 6d. A homely illustration will simplify matters. The Australian merchant buys tea in India and Ceylon, and pays in rupees, and has to send money from Australia to meet his purchases. Instead of sending, as formerly, about Is 4d for a rupee’s worth of tea, he has now to send nearly 2s 6d, or 80 per cent, more than before. So his tea costs him in exchange alone about 80 per cent, more than it formerly did, and the greater portion of his increase has been passed on to the consumer.

Australia enjoys the distinction of being the greatest tea-drinking community in the world. During the financial year 1918-19 the importations were over 45,000,0001b, representing a consumption of about 91b by each person. Taking the average household as consisting of five persons (the usual calculation), each family would during the year use about 451b of tea. Nearly three-fourths of all the tea imported into Australia in the year that has been quoted came from India and Ceylon, and was consequently affected as to price by the rate of exchange. An idea seemed to prevail formerly that China was, to a great extent, the world’s tea provider. Only about one-fortieth of the tea consumed in Australia is grown in China. If it were not or India and Ceylon the Australian markets would practically be bare of tea supplies. Why, it may be asked, should there he a prospect of the price of tea still becoming dearer? Irrespective of the question of exchange (the value of the rupee) other influences are at work which may, it is explained, have a serious effect as far as the consumer is concerned. The war is credited with having brought into being an entirely new class of tea drinker. During the hostilities tea became It is stated a popular drink with soldiers, and the effect of this will, it is anticipated, be a substantial increase in the demand for tea. Of this there are stated to be already unmistakable signs. Tea production in India has also, it is averred, not kept pace with the increasing demand, with the consequence that supplies are becoming scarce. A curious point with regard to the tea busines in Australia is said to be that, in the capital cities, low grades of tea are of very difficult sale. In the districts where workers are in a majority, the lower grades are practically unsaleable. The principal demand for these are in the country districts. Fears are understood to have been expressed that a considerable advance in retail prices could very shortly be expected. Some talked of tea. going up to 3s 6d or 4s jier lb. This is ridiculed by the trade, but, at the same time, the opinion is expressed that before very long an advance of 3d per lb may not be unlikely. The average consumption of an household being about 451b, the advance already recorded moans an addition to the housewife’s budget of £2 5s per year for tea alone, a considerable item where limited incomes are concerned. But the Australian housewife should not complain. She is much better off than her English sister, who ha.s to pay Is Customs duty on every pound of tea she buys. Since federation tea lias been on the free list in Australia. At one time a duty was contemplated, both on tea and kerosene, but both articles were placed on the free list in the interests chiefly of the workers. If a duty had been imposed of only 3d a pound a revenue of a quarter of a million would have resulted annually. New tea is costing the community ,£1,000,000 more a year than formerly, and chiefly because the value of the rupee has increased.