Silver Linings

“There is a crack in everything
That’s how the light gets in”

~ Leonard Cohen

This week we travel to Kerala – virtually, of course.  We speak with Mr. Anil George at Harrisons Malayalam to understand how the tea sector is faring in God’s own country.

For readers unfamiliar with Kerala – a bit of background – Kerala, a small state in the south west of India, has been lauded by various economists and anthropologists for what is now referred to as the Kerala model.  Kerala has, to its credit, created possibly the best social infrastructure in India – high literacy, exemplary healthcare, high life expectancy, low infant mortality and a low birth rate.  Hans Rosling equated Kerala’s life expectancy numbers with that of the US despite having a significantly lower per capita GDP (at 9:10 minutes).

The latest Covid -19 fuelled crisis has once again seen Kerala rising to the challenge and ensuring that it truly stands out. Numerous commentators now opine that Kerala’s could be a model to adopt.

For Kerala’s tea estates, 2018 and 2019 were challenging years – if it was not floods, it was droughts. Auction prices that trended down and wages that zoomed up. 

The start of 2020 looked promising as early rainfall had improved the water situation.  But then Covid struck.

Unexpected visitors in the activity less tea estate

And that was when the Kerala model rose to the occasion. Surprisingly enough, one of the beneficiaries has been the private sector.  An excellent example to demonstrate that investing in social infrastructure has payoffs that benefit all members – even industry.  There are 15 hill districts in Kerala where tea estates are now allowed to operate – in stark contrast with north east India which is still locked down. Auctions at Kochi center have already commenced and buyers have returned.

Operations resume with appropriate social distancing

Anecdotal evidence suggests that India has been consuming a lot of tea while being quarantined at home.  With retail and warehouse stocks running down rapidly, the situation augurs well for a jump in tea sales. The Kochi auctions have also witnessed the entry of new buyers – Germany and Malaysia.

Experts hold out the possibility of rates seeing an uptick – what with new buyers coming up against a reduced supply.

And then there was this report – the theaflavins in black tea could have a protective influence for the tea drinker from Covid.

Could Covid have a silver lining for the tea sector after all?

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