Agri Business

Tea Board chief sees a big market in rural India

L.N. Revathy Coimbatore | Updated on March 12, 2018

There is a need to protect the domestic market, says Tea Board chief.

A good cup of tea is essential to sustain in the domestic market, the Tea Board Chairman, M.G.V.K. Bhanu, has said.

At a session on Commodity Outlook, held on the eve of the 120th UPASI annual conference at Coonoor on Monday, Bhanu observed that the domestic consumption was of the order of 800 million kg to 900 mkgs.

World tea prices have fallen from $3.1 to $2.8 because of the bumper crop in Kenya and India. India achieved a record production of 1,115.7 million kg in 2011, which further improved to 1,126.3 million kg the following year.

Production estimates show that between January and June 2013, it was up by 15.6 million kg at 395.5 million kg compared to 379.9 mkg during the corresponding period of the earlier year.

"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 would drop by Rs 10 to Rs 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," the Tea Board chief said.

While underscoring the need to protect the domestic market for tea, Bhanu said: ‘In this digital age, where information is available at the click of a button, the opportunity to taste new beverages is more and consumers shifting to other drinks is a lot higher compared to the past.’

The Board has constituted a core committee of producers to ensure that the mortality rate is reduced and to have more people drink tea. It is towards this that the Board has, under the leadership of Hindustan Unilever come up with an ‘Indian Large Rural Market’ strategy to ensure rural penetration.

There is a perception in the rural market that tea consumption is not good for health. They perceive that a glass of milk is better than a cup of tea, as the latter is perceived to act only as a stimulant. We have to work towards changing this perception, the Tea Board chief 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 added.

The Board has issued a control order for implementation. Guidelines have been issued to the tea factories with a warning that if the teas produced in the factories fall below the prescribed quality or standard, the units would be penalised and even ordered to close down, rendering many jobless.

While issuing the ultimatum, the Board has also been considerate enough to give the factories time up to the next season to transform themselves and produce finer teas.

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 in the XII Plan Period," he said.

Published on September 03, 2013

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