The tea prices in Tamil Nadu dropped to Rs 65 a kg from Rs 95 as Hindustan Unilever and Tata skipped the auctions at Coonoor and Coimbatore.
There is no clarity on billing issues after the Goods and Services Tax (GST) implementation due to which both the majors did not participate, S Ramu, founder chairman, Small Tea Growers Association of Southern India said.
Hindustan Unilever and Tata have been sourcing nearly 70 per cent of the tea, which was coming from these two centres.
Previously, buyers and producers used to deal directly. Now, producers want to deal directly, but the buyers face difficulty as they need to work with different factories. Due to complications, the buyers now deal through sub agents.
It is a temporary issue which will be resolved soon, the grower added.
However, C Paulrasu, executive director, Tea Board at Coonoor said 20 million kilos have been produced extra compared to last year. The board attributed the price drop to excess arrival in the market.