The north Indian tea industry, especially Bengal and Assam, is plagued by lower production and auction prices this year.
The Indian Tea Association (ITA), the largest association of tea planters in the country, has stated a loss of production of around 21 million kilos of tea from January to March this year in north India due to inclement weather.
“The all-India production is lower by around 13 million kilos. Furthermore, during April, the weather was unfavourable for tea. North Bengal and Brahmaputra valley of Assam had a drought-like situation with almost no rain. Yield was low. In the Barak Valley of Assam, tea estates saw heavy rain and even hail that damaged the bushes,” said Arijit Raha, the ITA secretary general.
He said that if such conditions prevailed, it was unlikely that the industry would be able to even out the loss in production.
On the price front, the picture is equally dismal, said ITA representatives.
According to available data, the average price per kilo of tea in auction centres is down by Rs 16.30 from January to March this year compared to the auction prices of the corresponding period of 2023.
“Auction prices have also reduced in south India. As a whole, the national average auction price for a kilo of the brew is down by around Rs 16,” Raha added.
Last year, tea estates faced lower price realisations after the launch of the Bharat auction system by the tea board and the Centre in April 2023. Eventually, it was rolled back and the old English auction system brought back in November.
“But by then, the damage was done. In the 2023-24 fiscal, auction price was down by Rs 14.81 (per kilo of tea) compared to 2022-23. Now, fresh indications that prices might dip further have aggravated financial stress on the gardens,” said Rana Dey, secretary of the Terai branch of ITA.
The ITA representatives underscored that the crisis in the Darjeeling tea industry was acute because of low yields and prices, and influx of teas from Nepal, and sought a financial relief package from the Centre "recommended by the parliamentary standing committee on commerce".