South Indian tea planters worried over declining prices

Tea prices have dropped by Rs 14 per kg in South India so far this calendar year (2014) compared with 2013.

“This is in spite of a shortfall of 22 million kgs in all India production due to extreme weather conditions. Further, exports during the current calendar year is up by 6.7 million kgs and world production is also showing a similar trend as major producing countries have reported substantial drop in production,” said Peter Mathias, President, United Planters’ Assocation of Southern India (UPASI).

Mathias, in a press statement, wondered why the general economic principle of supply and demand is not working out for tea. While there has been considerable reduction in the price at the auctions, prices of packet teas sold to the consumer has also not changed.

He was aghast at the press statement made by a tea dealer association that the Government should relax the import norms for tea to allow import of large quantities.

The tea industry is getting into a crisis mode once again due to lower price realisation and skyrocketing cost of production. If the trend continues, Mathias said that it will be difficult for many of the estates even to pay the wages, on time. This industry supports 2.5 million workers directly and double the number of people indirectly.

He pondered why the demand for cheaper imports is made when there is sufficient quantity of all types of teas available in the domestic market. Indian teas over a period of time, has taken the challenge of meeting the world standards in all types of teas and they are equipped today to meet any demand.

The industry in collaboration with the Tea Board has put in place monitoring mechanism to ensure that teas produced in the country meet the stringent quality parameters laid down under various legislations in India and abroad.

If one looks at the statistics, production has been growing at an average rate of more than 4 per cent over the last five years and there is absolutely no shortage of teas in the country.

The tea industry over a long period has been requesting for the Government’s intervention in reducing the gap between price to the consumer and price to the producers. While there may be genuine reasons for the gap, it is necessary that the producer gets a fair return as it is an important agro industry supporting a large population in difficult and unaccessible terrains.

UPASI is of the view that the Tea Distribution & Export Control Order should be further strengthened to ensure that even in the case of imports for re-exports, only teas of high quality which meets all the stipulations of FSSAI as applicable to domestic producers are allowed.

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