Tea industry is faced with critical challenges: Tea Association of India

Guwahati: Stagnant prices and rising cost of production has pushed the tea industry into a critical stage triggering fear of lack of future interest in the business, Tea Association of India (TAI), a prominent association of tea producers have said.

"The primary challenge we face is that tea prices have not kept pace with increasing costs. Many estates have shut down, changed hands, or survive only through subsidies from their group companies with other business interests. The situation is so dire that we fear a lack of future interest in the industry," president of TAI, Ajay Jallan said on Wednesday while speaking at its 49ty biennial general meeting in Kolkata.

The concerns have been expressed at a time when Assam, the largest tea growing region, is celebrating 200 years of tea. Tea was discovered in Assam in 1823 and the cultivation extended to the rest of India. Assam alone has 800 big tea estates and more than 1.5 lakh small gardens.

The association said demand-supply gap, market dynamics and quality concerns in the local markets are the main reasons for the decline in the tea business.

"Tea prices are not keeping pace with rising input costs. The workers’ wages have increased to 200 per cent for the past decade, and in contrast the prices of tea have only risen by 30 per cent.The declining performance of tea plantations, rising incidents of pests due to climate change impact, dichotomy with the small tea growers and stagnant exports have pushed the industry to such a stage," the association further said.

India’s tea production in the past 15 years has increased by 39 per cent, from 981 million kgs in 2008 to 1366 million kgs in 2022. The production in 2023 is projected to be at around 1365 million Kgs, it said.

Way forward:

Jallan said the association proposed the Tea Board for early closure of production by or before November in North India. "The Board should regulate on selling tea waste in the domestic market to prevent the production of low-quality teas, restrict import of poor quality tea and boost local demand by investing in generic promotion of tea," it said.

The association also stressed on digital marketing, reforms in Plantations Labour Act, beside others to help the tea industry overcome the challenges.