For the Indian tea industry, these are troubled times.
In addition to shrinking exports, there is the massive production loss in the corona pandemic period of around 130 /140 million kilos: estimated financial loss Rs 2100 crore.
The silver lining is that with nearly all the resident workers resuming duty at Darjeeling and other North Bengal plantations, both production from and maintenance of the existing plants will get underway.
More importantly, the tea growers’ association has drawn up an alternate growth plan keeping in view the unforeseen problems resulting from a prolonged crisis. The comforting assurance of a strong domestic demand is an added sweetener.
Their remedy: to step up the supply of more quality tea within the country which in time should lead to a more robust demand. Hopefully, over a period of time in the medium term, the losses recorded in the post covid 19 pandemic period can be made up. Coupled with some concessions/relief from the Union Commerce Ministry, the industry should not suffer too much in the long run—this is the broad sentiment of the more optimistic industry bosses .
Efforts to secure such relief have already brought dividends. The Assam Government has announced a series of measures for the troubled industry . Assam media report that there would be a Rs 7 per kilo subsidy for the production of some orthodox varieties, a 3% subvention on all term loans and a withdrawal of agricultural income tax for 3 years. Producers feel that more relief for the production of orthodox varies should result in both increased domestic as well as foreign sales.
There is also fresh hope with renewed interest in the second flush of Assam varieties from buyers in Russia, Iran , the UAE and the EU countries, according to reports from Guwahati. .
Because of social distancing, and running plantations with skeleton staff, overall production was down by a massive 65% during March/April 2020. By May it was still around 50%, in Assam and north Bengal gardens. Indian Tea Association(ITA) sources say that all these months, the shortfall of workers/staff ranged between 20% to 50% in the North Indian (Assam and Bengal) plantations. In Kerala and the Nilgiris down South, almost 50% workers stayed away from work for one reason or another.
Meanwhile Tea Board circles have a scheme to promote and increase domestic sales, to offset partially the marginal drop in exports. Intriguingly, the export of 248.29 mkgs of Indian tea in 2019, as against 256.06 mkgs the year before, did not hurt industry financially, as the sale of higher quality teas ensured more forex earnings. However, the drop in demand from Pakistan, Sri Lanka, and Bangladesh nearer home , added to the lack of sizable orders from the UK, Egypt and the UAE last year certainly caused soms concern.
Board officials propose to carry out special campaigns in a few states to encourage greater consumption especially of quality tea among the people. Starting from Odisha, the campaign would cover Gujarat, Rajasthan , Bihar and Uttar Pradesh. The accent would be on explaining at the mass level the health benefits of cultivated tea drinking and the consumerist pleasure of imbibing high quality brews. There is also a proposal to push for more sale of orthodox varieties vis-a-vis traditional CTC items .
Board insiders estimate that additional domestic sales of around 30 to 50 mkgs in the months ahead should restore much of the stability to the industry, buffeted by strong headwinds on the post covid pandemic situation.
Not everyone agrees. One market analyst wondered whether there was much scope for increasing domestic sales through specific campaigns. He felt that the problem with tea sales in India was the relative lack of popularity of tea with the educated, employed youths who seemed to prefer coffee or even soft fizzy drinks. In contrast, the number of relatively older people who could be persuaded
to drink more green tea for health reasons or otherwise was much lower, he felt. Added to this was the fear among some industry bosses that the lack of exports could lead to a problem of overproduction and consequently lower prices, at home.
The total production of tea in India in 2019 was around 1400 mkgs, sources said.
(Ashis Biswas, veteran journalist and commentator, is now News Editor of Easternlink)
