Tea Industry in Acute Financial Crisis, Tea Association Says in a Report

The Indian Tea Association (ITA), the apex body of tea planters in the country, has said in a report that the tea industry is in an acute financial crisis. The report, titled “Tea Scenario 2023,” says that tea prices have not kept pace with the rising cost of production, and that the industry is facing several other challenges, including surplus production, declining exports, and climate change.

The report says that tea prices have increased at a compounded annual growth rate (CAGR) of around 4% over the last decade, while the costs of vital inputs such as coal and gas have grown at a CAGR of 9-15% during the same period. This has led to a widening gap between tea prices and the cost of production, putting a severe strain on the profitability of tea planters.

The report also says that the tea industry is facing a problem of surplus production. In recent years, there has been a significant increase in the production of tea, particularly from small tea growers. However, domestic consumption and exports have not grown at the same pace, leading to a surplus of tea in the market. This has further depressed tea prices.

In addition, the tea industry is also facing a number of other challenges, such as declining exports, climate change, and labor shortages. Exports of tea have declined in recent years due to a number of factors, including competition from other tea-producing countries and the imposition of tariffs by importing countries. Climate change is also having a negative impact on the tea industry, as it is leading to more extreme weather events such as droughts and floods. Labor shortages are also a major concern for the tea industry, as it is difficult to attract and retain workers.

The ITA report has called on the government to take a number of steps to help the tea industry, including reducing the cost of inputs, increasing domestic consumption, and promoting exports. The report has also called on the government to provide financial assistance to tea planters who are in financial distress.

The tea industry is one of the most important industries in India, providing employment to millions of people and contributing significantly to the country’s GDP. The financial crisis facing the tea industry is a serious concern, and the government needs to take immediate steps to address it.