Friday, July 10, 2020 - Pandemic Supply, Demand, and Pricing

Video Subtitles:

little happy Friday everybody just gonna
do some simple industry updates today I
found an article hi Sydney good to see
you
I found an article that kind of breaks
down what's going on with the supply and
demand in India so I thought I'd go over
that today how are you doing today Cindy
these like my my tea pots
so yeah this article is from financial
Express
and it's titled tea industry and doubts
even as prices increase so I'm sorry
about that Cindy I was having internet
connections problems earlier this week I
don't know I've been having all kinds of
Technology issues Dec at my house was
down for a bit now you know there's a
new unit there so back to feeling normal
in the house not constantly it's so hot
we're about to have a big heat wave here
over 110 degrees every day so it's going
to be very hot so I'm grateful the a/c
is working now
yeah if you guys want to join look to
catch up with you if you want to just
drink tea together and talk about how
your week with might be happy to do that
since we're talking about Indian tea you
get to make some Indian tea so yeah it's
been a little confusing on Keeping Up
with all the information from India
right now because some articles say that
the industry is suffering and then some
articles say that the price is
increasing and so there's a lot of
optimism and this is like the commodity
price this is like the local auction
price is increasing and so this article
is good because it kind of explains why
all these things are happening both
things are true the industry is
suffering and the prices are increasing
and they're actually in relation to each
other and this is of course all due to
to the pandemic one thing that the
article doesn't highlight is like what
the market is looking like what the
buyers are looking like because I think
that's an important thing with an
international commodity is that its
business is dependent on international
trade and India is gonna walk down right
now and I know from our experience and
you know other experiences in the
industry that conventional you know
trade methods transportation roads are
closed trucks are not able to you know
transport even from you know village to
village or town to town I think things
are starting to open up but you know the
the conventional trade methods are on
lockdown right now so that means that
there are like shipping containers
filled product that are just sitting at
the port's ready to to leave as soon as
the lockdown is over so I could only
imagine that that limitation is also
really affecting what's going on here so
overall in April this the data they have
this since April there has been a 54
percent decrease decline year-to-date
t production so you know last year by
that time by April there was eighty four
point four nine million kilos produced
and this year was only 39 0.02 so you
know that's decrease in supply
definitely affects the price and the
value of that product so that explains
why there's some increase and then as
far as price so what that price increase
does look like is during that at the
same time you know the price last year
at the quantities that they were at and
then this is the Guha t t auctions it's
a psalm t there t auction
the average price was 150 eight point
nine eight rupees per kilo and this year
it's two hundred and seventy three point
five rupees per kilo so you can see a
pretty drastic increase not you know
double but pretty drastic and they're
forecasting that the this increase
pricing is something that we can assume
will continue to happen into the future
as well
so it says for every 10% drop in the
crop costs for that T goes up about 30%
so that's kind of like the general trend
that they're starting to see happens in
the market when there's a reduction so
yeah we can make some forecasts of we're
pricing will go so that's very useful if
you want to keep that keep that in mind
for yourselves for every 10% drop and
harvests and production there's a 30%
increase in price
but where the issue is and where this
story ties back that the industry is
actually suffering is that labor has
gone up and and other resources have
gone up in price so cost of production
goes up so you know their production
amount goes down ten percent the price
is gonna go up thirty percent so you
would think in that math if all other
conditions remain constant that it would
work out
actually they're winning but what's
offsetting it is cost of labour has gone
up sixty five percent and other costs
have gone up another ten percent so it's
very possible that you know they're not
able to even break even
now the economics that they're working
up and these numbers are just like
average numbers so I can imagine like
case-by-case everybody every producer
and every garden situation is completely
different
clintus lee interesting little dynamic
going on
due to the pandemic right now that
prices will go up and things could
change too once all those trade methods
do open up as normal and it's very
unpredictable when that would happen I
mean we were expecting all this the
fizzle over and we'd be able to get back
to trade as usual in an April still the
first lockdown took them into like the
middle of April we were assuming
everything would get back on track and
here we are in in in middle of July and
as of now you know our logistics
contacts and India told us that
everything is still locked down until
the end of July and that of course is
going to be dependent on you know
numbers case numbers grow e let's check
that I haven't checked to that phrase
lately
so their numbers are growing as well I
mean their chart looks very similar to
the United States chart now they have
26,000 daily new confirmed cases it's
the highest and all the pandemic for
sure I mean they didn't it looks like
they didn't even really have an initial
spike it's just been a consistent growth
for them they did have a spike of deaths
and middle of June but their death rate
their death rate is actually higher than
the United States that could be a matter
of testing testing availability is
different for each country so I don't
I'm not even good relevance to that at
the statement I just made but yeah it
looks like India situation is not
getting much better so it'll be
interesting to see what the government
decides to do as far as opening up
trading because there are places where
the market is turning up as far as
opening up which is gonna support
increased demand of tea because I would
think that all of these numbers the this
pricing and this supply and demands
information that I shared from this
article is really only driven by the
domestic market because tea is not
really leaving India right now because
of the lockdown and I had read another
article talking about you know the
behavior the the consumption behavior of
tea is having to change right now too
because the the chai wallahs you know
who I think were responsible for a good
amount of the trade of tea domestically
in India are not operating right now I
was curious about that I'm gonna confirm
that right now like including like
street food vendors
but I saw an article saying that the
chai wallahs are not operating right now
oh yeah here it is this is the actual
article so yeah I guess Street food and
all this stuff is banned right now it's
also on lockdown pretty incredible so
people are still drinking tea in India
obviously if the if the prices are going
up it means that there's still demand
for whatever is being processed and put
into the market so they're having to
take their tea consumption into the
house which completely changes the whole
culture it's interesting and see how if
that does have an effect on how people
drink drink their tea maybe they'll
become more mindful of what ingredients
are putting into it or how they're
preparing it versus just you know just
drinking it on the street
yeah so I guess in the states that are
lifting lockdown so India is lifting
lockdown on states that have zero cases
and these food you know food vendors
these street food vendors and you know
try their business is plummeted because
you know I think maybe people aren't
returning to work because that was a big
part of the the business of of tea is
like in between meetings or you know if
you're skipping a lunch you can just get
a you know a milk tea on the street to
lake satiate any hungry you may have and
give you some energy they're not
drinking it that way right now so
they're drinking at home
so even before pandemic 80% of tea
produced in India was consumed
domestically so now they're kind of
pretty much out a hundred percent
this is interesting our Joon Kishore is
a senior manager at a health care
company in the city of gurugram about 50
kilometres from Delhi and pre
coronavirus would take five chai and
cigarette breaks each day type of them
that's cool drinking a lot of tea I
could only do one and when I'm in India
and I can't do it every day it's so much
sugar it's so sweet it's not what I'm
craving all the time it's good when it's
good though it's the spot
so this article is talking more about
the impact that that gathering hub of
like taking these chai breaks while
you're at work kind of serves a purpose
for the company of allowing empathy
building connection you know with your
colleagues and so if that's not there I
mean there's a whole bunch there just
the whole working from home trend that
you know have become so popular all over
the world it's changing the dynamics for
sure but at least they're still drinking
tea you know at least there's still a
demand for that public spaces work as
equalizers most people have unrestricted
access to these everyday relationships
are formed at these tea shops weather is
colleagues who are sharing tea and
cymbal says or university students
debating politics that was quoted from a
social scientist named Arun Connie
and so tea is the base of that social
space it's everywhere the the little tri
stands are everywhere and I always think
how do you pick your favorite one you
know I think that like there is an
element of convenience but those
articles is saying that you know usually
you have your favorite one that you like
to develop your relationship with and
spend your your time in that social
space with the other folks that also
share in that space most Indian
corporations have traditionally had a
hierarchical management model in which
the difference in status between
managers and employees can make it
difficult to talk freely in the office
so that's what you need the tea stall
for its you time a 20-19 study showed
that a toxic work culture in India is
one of the top reasons for employee
burnout with long hours lack of
work-life balance and demanding
workloads as contributing factors
escaping to a top rate top RIA is the
the tea stall often becomes the safe
place to discuss life inside and outside
the office that's cool I wonder how this
burnout culture is happening with the
lockdown
yeah so I mean there's also lots of
commentary that that even though people
are working from home that culture
hasn't changed that burnout culture is
even worse now
and so interesting I should put a like a
little call-out for my friends in India
about how their tea practice has changed
since they started working from home
panic working from home I got a call
it's okay yeah I'm gonna ask around I'm
gonna I'm gonna try to see if you know
what what the identified tea culture is
now since everybody's at home I mean
they're obviously drinking tea if if
this you know the even though it's
reduced output
they're definitely drinking less tea
let's see I'll do that Matt Matt
so before pandemic if they're 80 percent
so that's eighty four point four nine
times so sixty seven point six million
kilos was consumed domestically last
year up until April and then this year a
hundred percent of what was produced was
consumed innocently instead of 80
percent but it was less and that's a
thirty nine million
so yeah the consumption has gone down
significantly how much has it gone down
it's calmed down 47% reduction of forty
seven percent so yeah they definitely
are drinking less tea so yeah that would
explain why the price has gone up
because even though the same channels
that existed prior to kovat are not
active right now like the tea stalls
like this you know work social space
doesn't exist but they're still drinking
tea there's still a demand at home at
home DeMint I'm still gonna ask around
to see because I have some friends from
500 startups with that like you don't
work in offices tech companies they all
you know are probably y'all working from
home so ask them what is the typical tea
practice is different
nice thinking actually like all these
mystery cups of tea this may be the end
of milk - Tia are the milk - green tea
from inky it's very soft very gentle
how's everybody doing
we have some viewers on right now you
guys feeling tired I'm feeling a little
tired you probably tell I'm a little
tired
it's been a long week but yeah lots of
exciting things I like a few days ago or
no yesterday I came across this like
surge of energy and excitement for some
new projects coming up so it's just the
end of the week you know I think I need
the weekend to just kind of decompress
and start working on some of these
projects and get working next week so
the first one is two more virtual
festival events that I'll be doing with
Marcus so that was the festival for
progress that we did a few weeks ago we
you know kind of debriefed on on the
last event and decided we wanted to do
more in the same nature of bringing
different presentations together
different voices and perspectives and
and initiate the conversations but the
first you note that we're gonna do which
will be probably in a few months we're
gonna give ourselves more time in the
planning and preparation the first event
will be talking about the subtleties and
anti-racism so pretty much everything
but
criminal justice which tends right now
to be the center of the conversation
which is great it's relevant it's true
it's valid but I think the the work that
is approachable to us is the work in the
subtleties of the culture and how to
hold ourselves and the ones that we care
about the ones that we love accountable
for being mindful of those subtleties so
yeah there's going to be different
topics talking about how you know maybe
it won't be just about racism I was
talking with a friend last night who
does a lot of incredible framework
building for property rights and and how
property rights transcended to even our
our own body and our own mind and our
own soul and culture as property that we
own and we have control of the
boundaries that we allow others when
interacting with that property that we
own be it our our body our culture our
religion our point of view so how do we
like authentically and directly
communicate with the ones around us
especially the ones that we care about
right because those are the ones that
like we want around us and that we want
to be connected with and we want them to
be woke or whatever you want to call it
you want them to be conscious good
people and sometimes we allow our fear
of confrontation our fear of discomforts
our fear of hurting someone else is
feeling
to get in the way of us communicating
our own boundaries of what we're fended
by what we like what we don't like
whatever it is just our boundaries and
just knowing our boundaries and and
feeling the confidence that we can
address those boundaries with the people
around us without hurting them without
creating a conflict because I think
that's like a big barrier that's
definitely a big barrier and sexism but
it's it's almost the same barrier in
racism and and where it's where the work
needs to be happening right now is
internally right all of us need to learn
and and regardless of your background or
your identity or anything because
ultimately we all kind of grew up and
developed our perspectives unique as
they are we developed all of them under
a shared context under a shared culture
that is in denial of discrimination
denial that these things exists you know
everyone can vote everyone is a citizen
we've done that work already you don't
need to do any other work and and so in
that denial we you know we fear
confrontation of like letting our
friends know oh that was actually
offensive well you might have been
hurting that person with what you just
said so anyway that's the next thing
that we'll be doing it is yeah talking
about that very heavy subject and
bringing activists in the community
together to talk about it to give their
insight and inspirations and then in the
end of October we are wanting to produce
an election festival an election
awareness
vation event said i'd be pretty cool
kind of just talking about the history
and and our pride around our rights to
do that and that one and I want to make
big and I want to involve some partners
some other organizations that may have a
similar goal of you know what we're
trying to do of educating people on
their privilege that is oftentimes
abandon devalued for multiple reasons
you know one always works from two ways
right either it's like straight up taken
from you like you you straight up like
grow up and just have always had the
experience of like that privilege just
straight up taken from you so that's
like voter suppression these types of
things which are real things that really
happen and I'd like to bring the experts
together to talk about that reality so
there's that side of it and then there's
the other side of it where you you let
it go yourself no one took it from you
no one took that privilege from you you
you can just as easily go vote
conveniently like everybody else but you
choose not to because you feel like it's
not gonna count you feel like it's not
gonna make a difference that it's not
important and it's like that's the most
important thing that we have as citizens
of this free country
it really is the only thing we have our
voice we have our other you know few
rights but you know our voting is that's
the that's you know that's the one
that's had to been fought for us to have
that privilege but it's true that
privilege is straight-up taken from
people and so that needs to be addressed
you know that's very political issue how
we are going to control that we don't
know but being aware of it is the first
step
you know even though the Constitution
says they all have the right to vote
that right it's not always privileged to
everybody so that'll be happening at the
end of October right before the election
so you know I we haven't set the dates
but we'll definitely set it so like
that's leading up to you know the
deadline to register for every state and
making sure that we hit on everybody
give everybody the chance to get
activated with that to get engaged with
that my friend Brock Pierce is running
for president now he just this is a
brand-new thing he just registered and
starting to build up his campaign and he
put out a nice video yesterday
explaining his intention and why he's
doing it and and you know a lot of it
was like this kind of interesting this
kind of like for your base like I'm
worried I'm worried for this world so I
want to step in and take care of it but
I did like that a big part of the video
was like it really gave me the feeling
that his motivation is not necessarily
about him becoming president but around
the principles that he believes in
coming to the forefront which is free
and democracy transparency
accountability those are all the things
that he keeps pointing on and that like
technology is something that can help us
and all of those things right now the
technology exists the user ability is
proven but we need a leadership to
embrace those values and embrace that
culture and make that culture a part of
what's going on so and then he also just
said you know when for me would be just
you getting registered to vote and
voting if my activity here is
only having that goal then that's good
that's interesting I've never seen a
presidential candidate I think the most
interesting presidential candidate I saw
I wonder if he's still running the
libertarians haven't chosen their their
candidate just yet he's in the
libertarian Bunch and his whole campaign
is and if he gets elected the first day
he's gonna go in and eliminate the
executive and the Constitution yeah but
it's interesting some people's platforms
you know they're using that channel
which is a very expensive and resource
intensive channel to communicate with
the world but yeah just try to use that
channel to communicate his message his
perspective about how government should
be yeah I don't care who you vote for
what you vote for you know I do care if
you care for the people and love other
people and love yourself and you know
your opportunities that you do have
right now so getting an ageless voting
is I really be part of that my friends
still to this day it's an don't that's
cool we at least can have a discussion
right if you don't want to vote that's
fine but let's at least in each in the
discussion and then you can decide if
you still don't want to go after that
so yeah I was the big industry updates
that I've been seeing so far is this
explanation of the supply and demand in
India there was another good article
that came out in bone Appetit magazine
and their online healthy ish large what
sorts titles the asian-american tea
brands creating a more transparent
industry it's good good features three
different brands all very new brands of
all female founded which is great where
female but yeah very modern and young
hip brands you know all at least
claiming to be doing direct trade I know
one of them particular is doing direct
trade I work with them I help them out
three gents help them with some of their
belongs but you know they identified
that the mainstream tea brands and
popularity currently or a combination of
you know and said this article kind of
features the stories of these three
companies founded by people that grew up
in Asian tea cultures one of them
Taiwanese one of them Chinese and one of
them in being you know so they're
definitely not the same types of
cultures they all grew up in but still
you know their their observation that
the marketing of teas strictly as a
health product as a health life's
healthy lifestyle product is not doing
justice to the true culture of tea and
so that's why they started their friends
you know
it's cool kind of talks about cultural
colonization the neutralization so yeah
that's just bone Appetit calm slash
story /t - brands
huh I guess I closed the other arm you
can't share with you guys no that's okay
I had given you all the it though I'm
not the T price article well everyone I
think I am going to sign out
it's been good catching up with you nice
little update on the industry what's
going on I hope you all have a beautiful
weekend and I'll be seeing you next week
Monday