No.2/6/2007 - PSFT
Government of India
Ministry of Commerce & Industry
Department of Commerce
(Price Stabilisation Fund Trust) 

 24^th  April, 2007

O R D E R 

Subject:  Fixation and announcement of the Price Spectrum Bands for the year 2006 in respect of Tea, Coffee, and
 Rubber.

Government of India is implementing the Price Stabilisation Fund Scheme for the benefit of growers of Tea, Coffee, Natural Rubber and Tobacco w.e.f. April, 2003.  Growers with operational holding upto 4 ha. are eligible to enroll as Members under the PSF Scheme. The objective of the Price Stabilisation Fund Scheme is to provide financial relief to the Members when the prices of these commodities fall below a specified level.  Contribution to the Members’ PSF Savings Bank account, by the Price Stabilisation Fund Trust and/or the Member, in a given year is on the basis of categorization of the year as Boom/Normal/Distress Year.  Such categorization is done on the basis of a Price Spectrum Band, which is fixed and announced every year.  A uniform band of 40% for all the four commodities is adopted with the Price Spectrum Band of +/- 20% from the seven years’ moving average of international prices of the commodities.   

2.       When the average annual domestic price of a commodity falls below the lower band, the year for the concerned commodity is categorised as “Distress Year”, where upon the Price Stabilisation Fund Trust contributes  Rs. 1000/- to the Members’ PSF Savings Bank account. When the average annual domestic price of a commodity is above the upper band, the year for the concerned commodity is categorised as “Boom Year”, where upon the Member contributes Rs.1000/- to his PSF Savings Bank account.  When the average annual domestic price of a commodity remains within the lower band and the upper band, the year for the concerned commodity is categorised as “Normal Year”, where upon both the Price Stabilisation Fund Trust and the Member contribute Rs.500/- each to the Members’ PSF Savings Bank account. 

3.       In accordance with the Price Stabilisation Fund Scheme, the Department of Commerce, Ministry of Commerce and Industry, Government of India, has, on the basis of data relating to seven years’ international prices of each commodity obtained from the Commodity Boards, fixed the Price Spectrum Bands for the year 2006 for Tea, Coffee and Natural Rubber as under: - 

3.1 Tea –  

Seven Years’ Moving Average of International Price for Tea for 2006 was Rs.64.02. Therefore, the Lower Band and the Upper Band are Rs.51.22 and Rs.76.83 respectively. 

The Average Domestic Price for Tea during year 2006 was Rs.63.62/kg. Since the Average Domestic Price of Tea was between the Lower and the Upper Band, year 2006 was a Normal Year for Tea. 

3.2             Coffee-Robusta – 

Seven Years’ Moving Average of International Price for Coffee-Robusta for 2006 was Rs.37.88. Therefore, the Lower Band and the Upper Band are Rs.30.31 and Rs.45.46 respectively. 

The Average Domestic Price for Coffee-Robusta during year 2006 was Rs.63.02/kg. Since the Average Domestic Price of Coffee- Robusta was above the Upper Band, year 2006 was a Boom Year for Coffee-Robusta. 

3.3 Coffee-Arabica –  

Seven Years’ Moving Average of International Price for Coffee-Arabica for 2006 was Rs.83.31. Therefore, the Lower Band and the Upper Band are Rs.66.65 and Rs.99.97 respectively. 

The Average Domestic Price for Coffee-Arabica during year 2006 was Rs.109.84/kg. Since the Average Domestic Price of Coffee – Arabica was above the Upper Band, year 2006 was a Boom Year for Coffee-Arabica.  

3.4  Rubber –  

Seven Years’ Moving Average of International Price for Rubber for 2006 was Rs.52.07. Therefore, the Lower Band and the Upper Band are Rs.41.66 and Rs.62.48 respectively. 

The Average Domestic Price for Rubber during year 2006 was Rs.87.83/kg. Since the Average Domestic Price was higher than the Upper Band, year 2006 was a Boom Year for Rubber. 

3.5 Commodity-wise data tables for computation of Price Spectrum Band 2006 are given in enclosed statement PSB 2006 - I. 

4.       As no Tobacco Member has enrolled under the Scheme, no Price Spectrum Band was fixed for the Tobacco. 

5.       As per the calculation of the Price Spectrum Bands indicated in para 3 above, the year 2006 was a Normal Year for Tea. Therefore, each Member enrolled under the Scheme up to 31.03.07 will deposit Rs.500/- to his PSF SB account.  On confirmation of such deposit by a Member, the Price Stabilisation Fund Trust would deposit Rs.500/- to his PSF SB account.   

7.       For Coffee (Robusta & Arabica), the year 2006 was a Boom Year.  Therefore, each Member enrolled under the Scheme up to 31.03.07 would deposit Rs.1000/- to his PSF SB account.   

8.       For Rubber, the year 2006 was a Boom Year.  Therefore, each Member  enrolled under the Scheme up to 31.03.07 would deposit Rs.1000/- to his PSF SB account.   

9.       The Members of Tea, Coffee and Rubber are required to deposit their contributions, as indicated above, in their PSF SB accounts latest by June 30, 2007.

10.     For such members of Tea who have deposited a contribution of Rs. 500/- each to their PSF SB account, the concerned Commodity Boards would send a Monthly Statement to the Price Stabilisation Fund Trust in the enclosed format (PSB–2006–II) for claiming financial assistance for Members from the PSF Trust.  

11.     Commodity Boards, on receipt of financial assistance from the PSF Trust, would deposit the required amount as per calculations indicated in para 3 above, in their PSF SB accounts, latest by August 16, 2007. 

12.     Each Commodity Board, after deposit of financial assistance amount in the Members’ PSF SB account would send  an Utilisation Certificate (in enclosed Form PSB – 2006 – III) to the PSF Trust, latest by September 30, 2007.    

13.     It is clarified that the dates for deposits by Members and the PSF Trust/Commodity Boards, as mentioned in Para 9 above, are the last dates for the required deposit.  Members may, however, be encouraged to deposit their contribution at the earliest, preferably by April-May, 2007, so that the PSF Trust  may release financial assistance to Members well before August 16, 2007. 

14.     Commodity Boards are directed to inform the concerned members, their Associations, concerned Bankers and all their Field and Extension Officers regarding fixation of Price Spectrum Bands, categorisation of the year 2006 as Boom/Normal/Distress Year and deposit of the contribution amount in the Members’ SB accounts by the Members and/or the PSF Trust/Commodity Boards, within the specified time limit. 

                   Sd/-
(Amit Chatterjee)
                                               Chief Executive Officer

To The Chairpersons of
Rubber/Tea/Coffee/Tobacco  Boards

Copy to : The  Director  (Plantation), Department of Commerce