About 54% of tea produced in India is sold through auction houses with rest being sold through other modes. Through auction, large quantity of tea is distributed in an organized manner also in a short period. Furthermore, it also provides reliable means of selling and buying tea. Among the 14 auction centers in the world, 9 are situated in India. Though, at both, primary (auction or private sale) and retail level (consumer), tea is valued on the basis of its quality. Region wise, prices in north India command a premium over south India due to better quality of tea and higher demand for export. During CY13, the average auction price in north India reached Rs. 141 per kg from Rs. 70 per kg in CY06, registering a CAGR of 10.5% over the period.
Raw material is the major cost component of the tea industry. In FY13, it accounted for 46% of the total cost. Tea is among the most labour-intensive of all plantation crops. On an average, approximately 25% of the total expenditure is incurred on the labour cost.
Demand for tea in India has remained consistent as tea is being consumed in over 90% of the households as an integral part of the daily routine......
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