GUWAHATI: The Indian Tea Association (ITA) held its 141st Annual General Meeting at Kolkata on Friday. Addressing the gathering, ITA chairman Hemant Bangur, highlighted the sustainability challenges confronting the tea sector. He stated that the economic viability of the industry is challenged owing to the unsustainable increase in costs amidst unremunerative prices with adverse weather conditions across Assam and Bengal further aggravating the situation. The tea industry in North India, as of September 2024, has experienced a notable crop decline of 63 million kilograms as per available Tea Board data. This situation has neutralized the marginal gains in the domestic prices.
Bangur, highlighted the change in the production structure, with small tea growers and the organized sector coexisting in a competitive landscape. The chairman emphasized the importance of creating a level playing field, advocating for the organized sector to be relieved of certain welfare obligations.
The speech also addressed the significant increase in costs over the past decade, which has far outpaced the increase in tea prices. With a low compound annual growth rate (CAGR) of tea prices (2.88%) compared to rising input costs (10-12% CAGR), tea industry in the last decade has been in a perpetual state of crisis.
The Chairman also discussed the global oversupply of tea that stood at 391 Mkgs in 2023 and the need for strategic measures to restore equilibrium in the market. He called for collaborative efforts among leading tea-producing countries to address this challenge.
He highlighted the pressing issue of labour shortages due to urban migration, stressing the need for the industry to adapt to changing demographics by means to improve productivity in tea plantations. The Chairman underscored the importance of innovation and promotion in the tea sector, particularly targeting younger consumers and adapting to their preferences. He called for a united effort among all stakeholders to drive effective promotional campaigns and enhance domestic consumption.
On the export front, an increase by 31 mkgs till Aug 2024 is a positive sign. However, to reduce export related costs, the recent reduction of the RODTEP benefit to 1.4% from 1.7% needs a review. Chairman also urged for enhanced incentives to support the production of orthodox teas, which are highly sought after in international markets.
On the topic of quality and compliance, the chairman emphasized that the industry is committed to ensuring safe tea consumption through rigorous MRL compliance. The proactive measures taken by Assam and West Bengal State Governments and the Tea Board to foster an ecosystem of compliance, which is crucial for enhancing the brand equity of Indian teas, was commended.
The chairman called for the introduction of a statutory scientific quality grading system from one leaf to five leaf marks on tea retail packets to enhance market competitiveness and consumer trust.
The AGM was graced by Avanindra Singh, Labour Secretary, Govt. Of WB and Dr Lakshmanan S., IAS, Secretary Industries, Commerce & PE Department, Government of Assam as guests. B. Kalyan Chakravarthy, IAS, Addl. Chief Secretary, Labour, Assam joined online, stated a press release.
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