Agri Business

Wagh Bakri hikes tea price, wants lower import duty

Virendra Pandit Ahmedabad | Updated on May 21, 2012


The Wagh Bakri Group, India’s third largest tea packager, on Monday increased tea prices by another Rs 12 per kg in various categories, for a second time in five weeks and with immediate effect, and urged the Centre to reduce duty on imported tea to match supply with increasing demand.

On April 16, Wagh Bakri, which sells 2.8 crore kg of tea worth Rs 600 crore per annum, had increased prices by Rs 12 per kg. It markets its brands in Gujarat, Maharashtra, Madhya Pradesh, Rajasthan and Chhattisgarh.

Currently, India produces 98 crore kg of tea annually, of which 18 crore kg, worth Rs 2,500 crore, is exported. “We cannot stop export as we have struggled to develop this market over the last few decades.But we can certainly reduce duty on imports from the existing 100%,” Mr Piyush Desai, Chairman and Managing Director, said here.

If the government failed to annul the monopoly of tea garden owners and reduce import duty, prices of tea could touch the Rs 500 per kg mark in the next couple of years, he warned. The government should at least allow partial imports at reduced duty to match demand.

He said global warming and irregular rainfall in the tea-producing areas have resulted in increasing deficit between demand and supply. While the production is rising at 3% annually, consumption is galloping at 5%, he said. In the last three years, tea-makers have raised the price by Rs 30 to 40 per kg annually. This year also, there was a shortfall of five crore kgs in the March supply.

A reduction in import duty, as India did in case of sugar to make it available cheaper, could help the country match demand and supply, he said. South Africa, Indonesia, Kenya and Sri Lanka are among the tea exporters to India where the tea industry’s turnover is about Rs 11,000 crore per annum.

Mr Desai said India cannot increase tea production as very few areas receive more than 100 inches of rainfall annually and even these areas no longer have much cultivable land available.

Wagh Bakri’s factory near Ahmedabad blends one lakh kg of tea daily.

Published on May 21, 2012

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