The retail price of the tea increased by Rs 5 per kilogram in the local market, matching the surge in consumption with the advent of chilly weather, sources said on Saturday. Traders said that prices of black tea varieties witnessed a continuous steep rise for the past six months in the retail market.
The government’s move to reduce sales tax from 16 percent to 5 percent on tea imports did not even make a dent in prices which sharply increased in the local markets by 8 to 11 percent since July last year, depriving any relief to consumers. The government had reduced sales taxes on tea imports to discourage smuggling, but instead tea prices increased manifold during the past five months, packers and blenders agreed.
Previously, the wholesale price of “Danedar” (BP-1) tea in the wholesale market was Rs 540 per kg, which is now being sold at Rs 545 per kg while its retail price was Rs 565per kg. Similarly, the price of Leaf (PF-1) tea variety is being sold at Rs 565/kg in retail markets against its previous price of Rs 560/kg. The previous wholesale price of the same variety was Rs 515/kg, now it is being sold at Rs 520/kg.
Traders were anticipating a drop of Rs 60 per kg in tea price after a cut in sales tax on tea imports but prices surprisingly surged by Rs 60-70 per kg in the past six months. Market players see no sign of prices reduction on the local markets because of the devaluation of Pakistani rupee against US dollar. Retailer said that tea, considered to be the cheapest beverage, was now beyond the purchasing power of most people because of high price of tea, milk and sugar.