Com. Ministry mulls fixing minimum benchmark prices for different tea grades

The commerce ministry  and the Tea Board are considering an industrydemand for setting up minimum benchmark prices for different grades of tealeaves, an official said.

This is expected to increase themarket price of the tea which has been stagnant for past few years despiterising cost sending the whole industry into a downward spin.

Indian Tea Association (ITA) hasdemanded that the government should set up minimum benchmark prices fordifferent grades of tea leaves to promote growth of the sector and pushexports.

"Tea Board and ITA is indiscussions over the issue. The demand is reasonable," the official said.

The Small tea Growers, which constrictive50% of the Indian tea are also demanding the same. The big gardens are blamingthe STGs for bad quality tea while the STG is blaming the big gardens of notgiving price.

According to the industry,implementation of the demand would help tea companies to deal with thecost-disparity problem, which is impacting the sector.

As per the proposal of theindustry, various grades of tea should not be sold below certain prices set bythe board.

India exported tea worth Rs5,132.37 crore in 2018 as against Rs 4,987.59 crore in 2017.

The main export markets for Indiaare Iran, China, UAE, Pakistan and CIS countries like Armenia, Belarus,Kazakhstan, and Kyrgyzstan.

Tea production saw a declineacross the country during January this year at 13.96 million kg compared to17.68 million kg in the corresponding period a year ago.

South India contributed to theentire produce of 13.96 million kg in January, comprising 7.81 million kg TheTea Board is functioning as a statutory body of the central government underthe Ministry of Commerce.

It is constituted of 31 members(including Chairman) drawn from Members of Parliament, producers, traders,brokers, consumers, and representatives of governments from the principal teaproducing states, and trade unions. It is reconstituted every three years.