Organised tea growers in Assam announce crop holiday till next season

Our Commodities Bureau

Chennai, Dec 9: Squeezed between rapidly tumbling prices and fast eroding brand equity, organised tea growers in Assam have declared a crop holiday till next season effective December 1. The move is aimed at bring in a semblance of order among the tea plantations in the organised sector which would help them leverage their combined strength for a better price realisation.

Top sources in the industry told The Financial Express that the decision not to pluck tea leaves till next season since December 1 is aimed at regulating output and, therefore, prices. Besides, the move is also aimed at enhancing the quality of tea used for both domestic and export purposes, sources said.

“A major reason for the fast declining brand equity of Indian tea is the export of lower quality produce. Our aim is to remove this stigma. Better tea fetches better price in the international market”, sources said.

Tea production in Assam is estimated to be lower by one per cent January-July this year as against an 11 per cent growth during the same period previous year. The total tea production in Assam during the period was estimated to be 2,02,248 tonnes as against the 2,04,287 tonnes produced during the same period previous year. Assam produces both good quality orthodox tea and CTC tea.

At the national level, the production during January-July this year was down to a megre one per cent at 4,06,654 tonnes as against a robust 9 per cent growth at 4,10,461 tonnes during the same period previous year.

Average price of tea at various auction centres has tumbled to Rs 62.41 per kg in August this year down from Rs 65.86 per kg during the same period last year. However, for the whole period of January-August this year, tea prices were up by 5.15 per cent compared to a -12.24 per cent during the same period previous year.

Sources said that though the organised tea plantations are going for a quality update and brand equity facelift, those plantations in the unorganised sector are spoiling the party by stepping up production of low quality tea and flooding the market pushing the average prices down. “The middlemen at auction centres dictate price as the quality of tea brought is poor”, they pointed out.