Commodities

Factories seek Tea Board’s intervention to avoid closure

PS Sundar Coonoor | Updated on February 18, 2020 Published on February 18, 2020

The Nilgiri Bought Leaf Tea Manufacturers’ Association has cautioned that small-scale tea factories in the district will be forced to close down unless Tea Board intervenes with proactive measures to save the sector from the prolonged crisis.

“We are suffering huge losses with falling prices on the one hand and rising costs on the other,” association secretary L Vairavan told Business Line. “Nearly six per cent of the bought leaf factories have already closed down operations and laid off workers. More factories will follow suit.”

“Many factories are now put up for sale as owners want to exit tea manufacturing business to avoid further loss,” he added. “We have requested Tea Board not to go for selective implementation of law but to fix a minimum support price for our teas sold at public auctions as the Board is fixing the average price we have to pay the growers while procuring green leaf,” he said.

“In the current scenario, we are unable to pay the district average price fixed by the Board to the growers,” Vairavan said.

“We have been pleading with the Board to fix the green leaf price only at the end of the month based on the actual price we have received for the teas at the auctions to ensure price recovery. On the contrary, the board is pre-fixing the green leaf price at the beginning of the month, which is unrealistic for us,” he argued.

“Despite the mandatory closure of factories in the North announced by Tea Board, there is substantial volume of low-priced teas there pulling down the demand and price for quality teas of the Nilgiris. So we have asked Tea Board to impose some restrictions on capacity utilisation for factories in North India as well,” Vairavan said.

“We have also urged Tea Board to take steps to activate demand for our teas so as to push up the prices to remunerative levels,” he added.

Published on February 18, 2020
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