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Kohinoor Mandal

Kolkata , Aug. 28

CONFUSION over the assimilation and compilation of total domestic tea consumption figures continues as there is hardly any mechanism to monitor the tea drinking habits of Indians.

In 1999, Indian Institute of Management Calcutta (IIMC) conducted a study of the domestic tea consumption pattern. However, the Indian Tea Association (ITA), in its latest Status Paper on the industry, has rejected the projections and suggested that a statistical organisation should be appointed for studying the domestic tea consumption pattern instead of a management institute.

"The IIMC worked out projections on the basis of old data ignoring the then prevailing market conditions like re-imposition of excise duty, fierce competition from other beverages, etc. ITA and the trade in general strongly feel that the estimates/projection of domestic consumption needs re-assessment," the association said.

The institute said there would be an average growth of three per cent per annum in the domestic consumption of tea. On this basis, it estimated that in 2002 the Indian rural sector would consume 408 million kg (mkg) of tea and the urban sector another 285 mkg. The total consumption would be 693 mkg.

For 2003, IIMC suggested that rural tea consumption would increase by 2.45 per cent to 418 mkg and urban consumption would increase by 3.85 per cent to 296 mkg, bringing the total to 714 mkg. The ITA does not accept these figures. According to its calculation, domestic tea consumption in 2002 was 673 mkg only and for 2003 it was projected at 697 mkg, marking a growth of only 1.8 per cent.

ORG-Marg has also studied the pattern of domestic tea consumption but it has been restricted mostly to the packet tea segment. This study has projected a 1.8 per cent growth in domestic consumption.

"If we go by the IIMC projections, there should have been a shortage of tea in 2002 to the extent of 43 million kg. The reality is totally opposite as there was an over supply. In fact, market observers said there was surplus CTC tea which was carried forward in 2003," an ITA official told Business Line.

IIMC projections were based on 1998 statistics. Industry experts feel that 1998 was an exceptional year both in terms of production and price realisation.

"The 1998 disposal statistics were confusing. Despite a record production in that year, price of teas rose to a record high which was sustained up to September-October 1999 despite a in the tea production in 1999. It was a wrong decision to take 1998 as the base year," the expert said.

Despite being the largest producer and consumer of tea, the Indian sector lacks appropriate mapping of production and consumption levels. Sources said that the absence of accurate estimates had affected the formulation of long-term industry-wide action plans.

"It is also difficult to monitor tea consumption in India. First, it is a huge market and, second, a large number of local players have entered the market. Probably, the new Tea Marketing Control Order might introduce some sort of system in this haphazard market", the source felt.

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