Not a nice cuppa: Labour, production costs affect tea industry, many estates in Kerala shut down

Bengaluru: The tea industry is under pressure due to factors including increased cost of production and climate, the United Planters of Association of Southern India (UPASI) said.

Aideobarie Tea Estate in Jorhat, Assam. Reuters

Aideobarie Tea Estate in Jorhat, Assam. Reuters

"The tea industry is under pressure, there is no denying in that. The prices are below cost of production, wages are
increasingly getting determined politically without reference to the economic health of the industry, exports are being stagnant since many years," UPASI President N Dharmaraj told reporters.

"Now the climate effect as the last straw on the camel's back is adding to the pressure", he added.

Dharmaraj said the India International Tea Convention will be held between 22nd to 24th September at Nilgiris.

Stating that very few tea estates have made profit last year, Dharmaraj said in states like Kerala many tea estates have closed. "Due to high labour cost going up and the price issues, about seven or eight estates closed in the central Travancore area last year," he added.

India roughly produces 1,200 million kg of tea, out of which 230 million kg is exported. Out of 240 million kg
produced by south India, about 90 million kg is exported. Stating that 40 per cent of south Indian tea is
exported, UPASI officials said exports is a critical element of south Indian Industry.

Dharmaraj said the present drought situation is affecting the production "significantly". "....by April I think south India alone to be lower by around 10 million Kg; ....for the full year we expect 10 per cent decline. Normally the pattern in tea is April, May is big month, if we loose out, it is difficult to make up," he said.

Indian Tea Association Secretary S Patra said, at all India level in March there was bumper crop, but in April there
is loss due to unfavorable climate, so up to May it will be "somewhat so so like last year." About 22 per cent of India's tea production is from southern states, Patra said.

Pointing out that China is emerging as an "important" consumer of black tea, Dharmaraj said, "There is emerging
interest for black tea in China; it is more of a life style kind of a change that we are seeing in China."

India last year (2015 calender year) exported 3.93 million kg to China, which in value terms is about Rs 76.43 crore. Out of India's tea production about 80 per cent consumed by the domestic market.

"We have a very large domestic market, but the quantity of exports is very crucial for maintaining the price line, because the difference of even five to ten million kg impacts the domestic price. From the producers perspective increasing exports is very crucial," Dharmaraj said.

The 7th edition of India International Tea Convention with the theme "Let's 'Tea'm up for sustainability" will see
participation from USA, Iran, China, Indonesia, Sri Lanka, and Indonesia. It is for the  first time happening in a plantation district.


Published Date: May 03, 2016 08:21 am | Updated Date: May 03, 2016 08:21 am