Assam: Tea industry calls for united effort to overcome challenges

Guwahati: The tea industry has called for united effort to overcome the formidable challenges that continue to haunt it.

Speaking at the 132nd annual general meeting of the Assam Branch Indian Tea Association in Jorhat on Saturday, chairperson of the Indian Tea Association Nayantara Palchoudhuri said soaring production costs without matching price realisations amidst the perpetual increase in input costs is a retarding factor for growth.

Climate change issues such as declining yields, pest infestation and increased dependence on irrigation are additional worries. 

“Therefore, a long-strategy to address the challenges in hand and preparing the roadmap for sustenance is crucial,” she said.

“I must admit that to beat challenges that confront us, the effort has to be collective with the involvement of all stakeholders. The Association has shown the resilience to face challenging situations whenever the need arose. This spirit will prevail,” she said.

Assam is observing the bicentennial of the tea industry and it would be befitting to recall the pioneering efforts of the founders of the industry 200 years ago. “Let us join hands in extending our tributes to the Bruce Brothers – Robert and Charles and our very own stalwart, freedom fighter and martyr Maniram Dewan – the first indigenous planter of tea in Assam. Also, the Singpho Chief Bessa Gam, who had a big hand with the other founders in laying the foundation of the tea plantation in Assam,” she said.

Coming to prices, as per available data, Guwahati auction prices in 2022 have shown a moderate increase from 2021 levels. “However, to enable the industry to remain viable, it is imperative that tea prices be remunerative keeping pace with the rising inflationary trends, which is not happening. In the current fiscal (up to the week ended 11.02.2023), 49% of North India CTC and dust sold below Rs 175 per kg at the auctions, well below the cost of production of the organised sector,” she added.

Production in Assam in 2022 rose 9.52 million kgs while all India production at 1340 million kgs was almost at par with the 2021 levels. Global Black Tea production in 2022 as per the latest available data has been adversely impacted by around 65 mkg, primarily on account of the dip in Sri Lankan tea production. “Maintaining a healthy equilibrium of demand and supply is therefore critical for viability,” she said.

She said for the long-term viability of the tea sector, it is important that the present turnover increases substantially to enable us to meet the growing aspirations of the workforce and ensure a reasonable return on investment to producers. “While further increase in production is not an option, fair price discovery is the only way. Without an increase in prices and sustained emphasis on quality, the industry cannot remain viable. The Association’s proposal for the introduction of a minimum floor price could be a way to fair price discovery,” she said. 

Domestic tea consumption in 2022 was estimated to be about 1170 mkg, increasing annually at about 2.32 per cent. The Tea Board has estimated current per capita consumption at 850 gms, an increase from 786 gms. 

“All stakeholders have acknowledged the need for a long-term domestic promotion initiative. This has been pending for a long time and I would request the Commerce Ministry and Tea Board to consider this issue on a priority basis. A joint initiative with the participation of all stakeholders in the value chain would positively impact increasing consumption patterns in the years ahead,” she added.

Branding of Assam Teas: Assam tea’s worldwide popularity and acceptance are phenomenal. “Our attention should now be towards such Marquee estates producing the best teas which are sustainably certified and can be promoted under the Assam Logo of a Gold Standard in the international market,” she said.

Exports: Indian exports have picked up in 2022 after a decline in 2020 and 2021 due to the pandemic and other factors. Indian tea exports are higher in 2022 by 18% – around 31 mkg till November 2022. She said in order to realise our vision of achieving an export target of 350 mkg in the next 3-4 years, our export costs need to be competitive. 

Imports: The recent surge in imports in the last three years is a matter of concern. “Given the fact that our domestic market faces a situation of oversupply, the surge in imports from Nepal from 7 to more than 15 mkg at costs well below the cost of production of Indian producers leads to an adverse impact on prices and sale of Indian teas in the domestic market. Hence, to protect the domestic market there is a need to strengthen the inspection and regulatory mechanism by ensuring that imported teas are in conformity with FSSAI regulations,” she said.

Chairman of Assam Branch Indian Tea Association Sailendra Kumar Goswami called for an extension of the Assam Tea Industries Special Incentive Scheme which will expire in March this year by five years, an extension of the Agricultural Income Tax holiday for three years, and formulation of an incentive scheme to boost exports from Inland Container Depot, Amingaon to defray high freight and handling costs.

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