The Tea Board has joined hands with Hindustan Unilever to launch an “Indian Large Rural Market” strategy to promote the beverage in interior parts of the country.
According to Tea Board Chairman M.G.V.K. Bhanu, the strategy will attempt to change the perception in rural areas that a glass of milk is better than tea, which is perceived to act only as a stimulant.
“We have to work towards changing this perception,” the Tea Board chief said, adding that a good cup of tea is essential to sustain in the domestic market.
A core committee of producers has been set up to encourage more people drink tea.
Underscoring the need to protect the domestic market for tea, Bhanu said that in the current digital age, where information is available at the click of a button, the opportunity to taste new beverages is more. “Compared to the past, consumers’ shifting to other drinks is higher,” he said.
Addressing the Commodity Outlook session at the 120th Upasi Annual Conference at Coonoor, Bhanu said that the domestic consumption of tea was between 800 million kg and 900 million kg.
A bumper crop in Kenya and India has dragged world tea prices from $3.1 to $2.8 a kg,.
A record 1,126.3 million kg was produced last year against 1,115.7 million kg in 2011.
Production estimates show that between January and June this year, the production was up by 15.6 million kg at 395.5 million kg.
“Tea is very sensitive to price fluctuation if the demand and supply balance is not maintained.
If there is excess supply of 10 million kg in the market, the price will drop by Rs 10-20 a kg.
But this year, the price has not fallen because of rising domestic demand. There is, therefore, a need to protect the domestic market,” he said.
According to Bhanu, any dilution on the quality front would have an adverse impact on demand.
“Unless we improve on quality, we cannot survive,” he said.
The Tea Board has issued a control order for quality implementation. Guidelines have been issued to tea factories with a warning that if the teas produced in the factories fall below the prescribed standards, the units would be penalised and even ordered to close down.
While issuing the ultimatum, the Board has also been considerate enough to give the factories time till the next season to change and produce finer teas.
Rising input costs
Age of the bush is another issue impacting both quality and productivity, Bhanu said and pointed out that the Board has identified about 1.48 lakh hectares of land/ bushes that are over 50 years old.
“We are targeting 50,000 hectares during the 12th Plan,” he said.
Rising input costs is affecting the domestic tea industry, according to industry players.
Speaking to Business Line on the sidelines of the 120th UPASI annual conference, they said that while the cost of production has increased 23 per cent, the impact due to wage revision has gone nearly doubled.
“A worker in South India, who used to earn a daily wage of Rs 120 about four years back, is now paid Rs 200/day. The increase in input cost cannot be ignored, but tea growers and producers have no control on the selling price of tea,” an industry source said.
Tea Board Chairman said the small tea growers’ sector was growing and the quality of teas offered by them, improving.
“We have to ensure that the price that the tea fetches in the market is commensurate with the rising cost.
The contribution by the small growers sector is significant, accounting for nearly 32 per cent of the teas,” he said.
While this is so, in Assam, Tirupura, Arunachal Pradesh and Nagaland, the sector comprising small growers is a new phenomena.
“These growers have come up on their own and without any support or guidance from research institutions.
Most of them opt for low quality, high productive clones and use pesticides indiscriminately, unlike the small growers in the South, who are better informed,” Bhanu said.
To address the problems of the small tea growers, the Board has opened 107 tea offices and posted development officers, who will act as a friend, philosopher and guide to the small tea growers, organise them in to self help groups and provide technical advice with the help of UPASI Tea Research Institute.
In a bid to serve all the stakeholders in the quickest possible time, the Board has put in place several administrative reforms starting from biometric identity cards.
“We are hoping to move to paperless office in the next 18 months,” he said