Agri Business

Cuppa crisis: Tea output in the North expected to fall by 15%

Shobha Roy Kolkata | Updated on October 20, 2020

Unfavourable weather, lockdown hurt production; prices, too, heading for a crash

The tea industry in North India (which includes gardens in Assam and West Bengal) is expecting around15 per cent drop in production at 996 million kg (mkg) during this calendar year. North India had produced close to 1171.09 mkg in 2019.

While the production up to August this year is already down by around 150 mkg, as per provisional estimates available on Tea Board of India website; the crop in September and October is also expected to be down due to unfavourable weather conditions.

As per the provisional estimate available on Tea Board website, production during January-August 2020 was down by around 150.97 mkg at 533.48 mkg compared with 684.45 mkg during the same period last year.

According to Vivek Goenka, Chairman, Indian Tea Association (ITA), production in September is likely to be lower by 8-10 per cent this year at around 152 mkg (168.90 mkg).

It is to be noted that the North Indian tea estates lost nearly 65 per cent of the first flush crop as plucking activities had come to a standstill on account of the lockdown due to Covid-19 pandemic. This, coupled with the unfavourable weather conditions, led to a slower growth of the bush impacting production of the second flush in subsequent months. Tea production in North India accounted for nearly 84 per cent of the country’s total production, which stood at around 1,390.08 mkg in 2019.

Prices fluctuate

The lower production and the steady demand pushed up prices of both CTC and orthodox tea in August. The average prices of CTC and dust had firmed up by over ₹120 a kg on a year-on-year basis at the auction centre in Kolkata in August.

As per data available on Tea Board’s website, the average price of CTC and dust at the Kolkata auction centre was ruling at around ₹302.91 a kg as at end August, almost ₹133.44 a kg higher than same period last year. The average price of CTC and dust at the Guwahati auction centre was also up at ₹297.81 a kg in end August as compared with ₹155.37 a kg same period last year.

However, prices have been falling over the last month. In fact, the price at the recent sale which concluded at the Guwahati auction centre was lower by almost ₹71 a kg compared to the sale which concluded about a month ago.

“While prices continue to remain firm on a year-on-year basis, however, sale prices have been falling over the past couple of weeks and there is clearly no idea as to why this is happening,” said Priyanuz Dutta, Secretary, Guwahati Tea Auction Centre.

Early closure

Since the initial crop estimates so far in October do not look very encouraging, the industry is not too hopeful of making up even partly for the loss in production this year.

“In terms of production we had a record crop in November last year so it is very difficult to have that kind of production this year and in December we are shutting early as per the Tea Board directive so I do not see any scope for making up this loss in crop even partly,” Goenka said.

The Tea Board exercising the Tea Marketing Control Order has directed all factories to stop manufacture of the beverage starting early December in order to stop production of inferior quality of teas.

It is estimated that the early closure would drain out about 25 mkg of poor quality teas from the system.

Covid management at tea estates

According to senior officials of the Indian Tea Association (ITA), tea estates in Assam and Bengal have been able to efficiently manage the Covid-19 crisis by keeping the number of positive cases across estates at below three per cent levels.

It is to be noted that close to 40 million people including workers and their families reside in more than 1000 tea estates in the organised sector. The Assam branch of ITA under its joint initiative with UNICEF has been undertaking several measures to keep the outbreak under control in tea gardens where the labour lines are closely packed. This apart, the management of tea estates along with the labourers have been able to take proactive steps to keep a check on the outbreak.

“Continued awareness generation is being done on the importance of hand washing with soap, social distancing, using of mask and other preventive measures in the garden on an ongoing basis. Fortunately except for a few cases of Covid-19 being reported which are specifically amongst migrant workers who have come from outside the state, no Covid cases have been reported from amongst the permanent resident population,” an ITA official said.

The garden managements at have been sanitising the labour lines within the garden at regular intervals.

The estate management and ITA used social media as a communication tool to spread awareness through WhatsApp.

Published on October 20, 2020

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