Guwahati: Is the tea industry losing its validity, which might lead to a lack of future interest in the industry?
President of the Tea Association of India Ajay Jalan recently said the situation is so dire that it fears a lack of future interest in the industry.
“The primary challenge we face is that tea prices have not kept pace with increasing costs. This cliché has led many to question its validity, not realising that many estates have shut down, changed hands, or survive only through subsidies from their group companies with other business interests,” Jalan said at the 49th Biennial General Meeting of Tea Association of India at the Tollygunge Club in Calcutta.
One of the issues which Jalan feels is hitting the industry is the positioning of tea as a cheap beverage. “In India, tea is perceived as the common man’s drink, where a lower price is key to gaining market share. This race to the bottom for cheaper and more affordable teas to gain higher market share has led to a decline in the quality of teas, as quality comes at a cost. The demand for poor-quality teas has changed the entire dynamics of production and consumption, seriously impacting the sustainability of the Tea Industry. It’s imperative that we reposition tea to enhance its perception and consumption patterns,” he said.
Though India’s economic strides are commendable, the tea industry is currently experiencing challenges reminiscent of the dark period of 2002-2007, calling for introspection and resilience.
India’s tea production in the last 15 years has increased 39%, from 981 mkgs in 2008 to 1366 mkgs in 2022, but tea prices remained stagnant over the years except in 2020 when buoyancy in prices was noted arising out of the pandemic.
In the current year, India’s exports till October 2023 are 182.69 mkgs, which is 2% less than last year.
Tea prices have not kept pace with rising input costs and workers’ wages have increased to 200% over the past decade. In contrast, the prices of tea have only risen by 30%. The declining performance of tea plantation workers is a significant challenge.
“The tea market is characterised by a concentration of market power among a few key players. This dynamic can often lead to situations where the interests and well-being of producers facing financial constraints and the broader industry are overshadowed. Addressing this imbalance is vital for the health and sustainability of the entire tea ecosystem,” he said.
To establish demand-supply equilibrium, supply needs to be restricted in the short term and create demand for teas in the medium and long term.
“The oversupply’s impact is deeply felt with suppressed prices, struggling to meet production costs, hitting our large organised growers particularly hard. This challenge extends beyond economics; it directly affects the livelihoods of millions connected to our industry,” he said.
About 30 million kgs of poor-quality teas are imported annually and restricting these imports by imposing minimum import prices is crucial, he said.
Tea Association of India has consistently urged the Tea Board and the central government to invest in the generic promotion of tea, emphasising its health benefits. Numerous studies over the past 15 years have highlighted tea’s potential health advantages.
The tea industry could leverage on digital marketing and E-commerce as a marketing strategy for generic promotion. “In today’s digital age, digital marketing and e-commerce by having a robust online presence are crucial for reaching new consumer demographics, especially millennials and Gen Z,” he said.
Dear Reader,
Every day, our team at EastMojo travels through rain, rough roads, and remote hills to bring you stories that matter – stories from your town, your people, your Northeast.
We do this because we believe in truthful, independent journalism. No big corporate backing, no government pressure – just honest reporting by local journalists who live and breathe the same air you do.
But to keep doing this work, we need you. Your small contribution helps us pay our reporters fairly, reach places others ignore, and keep asking the tough questions.
If you believe the Northeast deserves its own fearless voice, stand with us.
Support independent journalism. Be a Member.
Thank you,
Karma Paljor
Editor-in-Chief, eastmojo.com
He spoke of reforms needed to create a level playing field between Big Tea Growers and Small Tea Growers. “The Small Growers sector, which is no longer small, with a lower production cost structure than Big Tea Growers but competing in the same market space, threatens the very existence of Big Tea growers. Hence, reforms are required where all statutory and labour norms applicable to Big Growers should be also applicable to small growers,” he said.
Also Read: Roman script for Kokborok: Tribals say Tripura CM support is ‘nothing major’