The yr witnessed the tea trade going through an unsure future, affected by rising enter prices and lower cost realisation at auctions, making operations unviable. The apex physique of the planters, the Indian Tea Affiliation (ITA), has estimated that whereas tea costs elevated at a compounded annual progress fee (CAGR) of 4 per cent over the previous decade, enter prices of coal and fuel have concurrently risen at a fee of 9-15 per cent.
Secretary normal of ITA Arijit Raha mentioned worth realisation developments declined alarmingly in 2023 in comparison with 2022.
“Whereas inputs prices have risen, tea costs haven’t elevated in a proportionate method. This reveals that the trade is passing by means of a disaster,” Raha mentioned.
ITA mentioned the emergence of small tea growers (STGs) resulted in an exponential rise in manufacturing. With inside consumption nearly stagnant and the exports situation depressed, surplus tea has remained within the system.
Based on Tea Board information, exports of the beverage throughout January to September declined by 4.93 per cent to 157.92 million kg in 2023. In the identical interval of 2022, shipments stood at 166.11 million kg.
Tea trade sources mentioned the export situation stays grim as shipments to Iran are in jeopardy as a consequence of points over fee.
The Iran market constitutes practically 20 per cent of India’s tea exports, and that is inflicting monetary stress for the exporters. In 2022, complete tea exports from India stood at 231 million kg, the information confirmed.
President of the Confederation of Indian Small Tea Growers Associations (CISTA), Bijoy Gopal Chakraborty, mentioned, “2023 has been a foul yr for the STGs.
Manufacturing prices are greater than the costs, which is affecting the tea trade and making it troublesome for us to stay viable.” Chakraborty warned that if this development continues, many STGs could also be pressured out of enterprise.
The STGs, which function on land holdings of lower than one hectare, contribute to greater than 55 per cent of India’s complete tea manufacturing.
In West Bengal, practically 65 per cent of the entire output comes from the STGs.
Chakraborty mentioned there are practically 3 lakh STGs working within the nation, with a majority of them situated in Assam, West Bengal and some South Indian states.
The Tea Board information signifies that manufacturing within the nation, particularly in North India, had fallen in 2023, which has been largely as a consequence of opposed climatic components and pest assaults.
In 2022, India’s complete tea manufacturing was 1,365 million kg.
“Regardless of a lower in manufacturing in 2023 in comparison with 2022, costs have remained depressed. That is in opposition to economics. It contradicts financial ideas, which counsel that costs rise when provide is low,” Chakraborty mentioned.
He mentioned if STGs endure, it is going to even have a unfavourable influence on the purchased leaf factories (BLFs).
The ITA has additionally instructed that the federal government present monetary help to stop the approaching disaster within the Darjeeling tea trade.
One other trade physique, the Tea Affiliation of India (TAI), has additionally raised considerations in regards to the disaster within the gardens of North Bengal. P Okay Bhattacharya, the secretary normal of TAI, mentioned, “Roughly 13 to 14 gardens within the areas of Dooars, Terai, and Darjeeling have closed down affecting greater than 11,000 employees.” The North Bengal area produces roughly 400 million kg of tea yearly from 300-odd gardens.
TAI has highlighted that growing enter prices have hindered the operational viability of the tea gardens in North Bengal.
Based on TAI, worth realisation on the Siliguri Tea Public sale Committee has been decrease in 2023 than 2022, additional impacting the trade’s viability within the space.