Agri Business

Planters, buyers hail move to curb production of sub-standard tea

Our Bureau Kolkatta | Updated on November 01, 2018 Published on November 01, 2018

Tea Board ordered closure of plucking, processing in the North by Dec 15

In a bid to reduce supply of sub-standard end-season tea, the Tea Board has ordered closure of plucking and processing activity in North India latest by December 15. Industry sources expect the initiative to reduce supply glut, improve image of Indian tea in the overseas markets and offer possible price support.

According to an order issued on October 31, plucking should stop on December 10 in Assam and the rest of North East and on December 15 in West Bengal. Cut-off dates were also issued for closure of processing green leaf and completion of packaging.

The order — which was issued invoking powers under the Tea (Marketing) Control Order, 2003 — was welcomed by the industry which is suffering from over-supply led price stagnation, especially in the last two years.

The issue was discussed at the last meeting of Tea Board in September.

South India has been kept out of the initiative, primarily due to difference in seasons. Also, South Indian production is down by nearly 14 million kg to 143 m kg during January-August. In comparison, production was up 3 m kg to 637 m kg in North India till August.

The average price in North India till October was ₹149.12 a kg which is slightly higher than the full year average of ₹144 a kg in 2017. But this price advantage is expected to erode by December when more teas will enter the market.

Going by last year’s average, December alone was expected to contribute 55m kg taking the total North Indian tea production slightly higher than last year’s 1,087 m kg. The plan is to reduce the December production by 25 m kg to limit the annual (calendar year) production from the region at 1,060 m kg.

The initiative was well received by both planters and buyers. While reduction in 25 m kg production (which is equivalent to a week’s consumption) may not have a direct bearing on prices, sentiments will surely improve.

“Tea quality deteriorates in December. In the past, plucking used to be closed in November. And, in areas selected for pruning, plucking is stopped in October to help the plants reserve starch which helps faster recovery of production by the start of the new season in March,” said a planter from Dibrugarh in Assam.

According to him, the mushrooming of bought-leaf factories which have a great appetite for green leaf has changed the culture. He welcomed the Tea Board initiative to force closure of production but not without concern about implementing the order.

“If the order is strictly implemented, industry will gain. If not, those who flout the order may gain,” said a planter.

Published on November 01, 2018
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