INTERNATIONAL TEA PRICES IN 2003

摘要

Prices of made tea at auctions in producer countries are currently low, very low. The very low level of prices received for made tea by producing countries has attracted much attention, not only in media distributed largely to the tea industry, but inthe general press as well. Several articles of late suggested that declines in the prices of green leaves and made tea have not been adequately reflected in prices paid by consumers for loose and packet as well as tea bags at retail. Tr, charges imply that while the tea indu try in importing countries is benefitit from alleged high levels of retail pricJ and low costs of green input, growers' are suffering critical hardships. Tariff escalation in importing countries (referring to a situation where tariffs arc zero or low on primary products and then increase, or escalate, as the products undergo additional processing) has certainly contributed to the industry's problems in growers countries, and by refusing to cut prices at retail even though the price of raw material has collapsed, consumers have benefited little from the fact that auction prices have fallen so much. However, it is of course simplistic to argue that because the price of made tea in growers countries has halved, the price of tea bagson the shelves should have halved as well. As with any consumer product, raw materials form only a small part of the sale price of tea bags, tea packets etc. In fact, the collapse in prices received by producers is a classic illustration of the theory which brought prizes to Indian economist Jagdish N. Bhagwati of Columbia University in New York, for his theory of "immiserising growth". This concept explains why under certain circumstances, fast increases in productivity result in those responsible forit being worse off than they were before. When the cost of producing a commodity such as tea falls much faster than the demand for it increases, most of the resulting benefit accrues to importers and consumers. Growers producing so much more, often benefit little.