Commodities

Tea dealers reiterate demand for scrapping import duty

Rutam Vora Ahmedabad | Updated on July 09, 2014

Waghbakri Group Chairman and President of the Western India Tea Dealers' Association (WITDA), Piyush Desai, has once again reiterated his demand for removal of 100 per cent duty on tea imports, citing a possible shortfall of tea in the country. This comes amid stiff opposition from tea traders and the tea growing community across the country.

 

Expressing concern over a delayed monsoon at tea planting regions and a possible shortfall in crop this year due to that, Desai said, “In the first two months of this year, there is a deficit of 21.37 million kg in tea crop as compared to last year. This is due to delayed rains at the planting regions. Tea consumption is growing at a pace of 4 per cent annually, while production is almost stagnant.”

 

Notably, Desai has been raising the demand for the past three years but the Tea Board of India and the Centre have not agreed to relax the import duty on tea. Tea growers have been opposing any relaxation in import duty, fearing tough competition with imported tea.

 

According to Desai, India requires around 40 million kg of tea from Kenya and Sri Lanka to meet any eventuality of a shortfall. However, currently India’s annual tea production is around 1,180-1,200 million kg, of which around 970-980 million kg is consumed within the country and about 170 million kg is exported.

 

Desai blamed the previous UPA Government for ‘over-protecting’ the tea industry by discouraging tea imports with 100 per cent import duty. “When there is a situation of crop failure or drought, domestic supplies will be hampered. It is a pitiable situation where consumers will be deprived of tea, especially when our Prime Minister himself has a background of tea,” Desai told mediapersons here.

 

He said in the next five years, India’s consumption will increase substantially, while with stagnant production, tea prices will double. According to Desai, tea procurement prices at auction centres have jumped by Rs 30-40 per kg in the past during May-June period.

 

“Retail tea prices will continue to increase by Rs 20-30 per kg every year,” he added.

Published on July 09, 2014

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