The Consultative Committee of Plantation Associations (CCPA), a joint forum of tea planters, tea growers, tea sellers and tea brokers, came together on Tuesday in Guwahati to deliberate on the problems faced by the tea industry and their possible solution.
Addressing the media, the CCPA informed that the Indian tea industry is confronted with several challenges which are threatening the long term viability of the industry.
“The sector is reeling under cost pressures due to price stagnation in the backdrop of perpetually increasing cost of production, mismatch between demand-supply leading to oversupply, high transaction costs and fair price discovery changes at the auctions, climate change adversities etc,” read a press release by CCPA.
Tea prices have remained stagnant over the last few years, resulting in severe stress to the tea sector.
Tea Prices have grown at a CAGR of around 1% over the last few years, but cost of vital inputs like coal, gas, Sulphur etc have increased at a CAGR of 6-7% during the same period.
Wages of Tea Garden Workers increased by around 22% in 2018 in Assam, resulting in financial stress of the industry further.
The CCPA further stated that per capita consumption of tea in India at 286 grams per year is low when compared to some other tea consuming countries. The body urged the government to set up a dedicated fund for undertaking vigorous generic promotion campaigns in the domestic market to boost consumption.
It further asked the government to consider immediate imposition of a ban on expansion of Tea Area for a period of at least 5 years to check oversupply. The forum added that there must be a sustainable Minimum Benchmark Price (MBP) for Green Leaf which would cover the cost of production of the Small Tea Growers (STGs) since they contribute 50% in Indian Tea Production.