The Indian tea industry has to focus on improving quality in order to ‘claw back’ ground lost to competitors in the export market, the Centre told the big garden owners, amid concerns about falling prices and rising input costs.
“We need to claw back our position in exports and try to regain some of our lost markets,” Amardeep Singh Bhatia, additional secretary, ministry of commerce, government of India, said.
Addressing the 140th annual general meeting of the Indian Tea Association (ITA), the body of organised planters, Bhatia pointed out India’s share in world export has declined over the years.
“Our competitors from Kenya, Sri Lanka have increased their share in the global markets during the period,” the secretary, who joined the AGM virtually from Delhi, said.
He also pointed out that India’s share in world production has also gone down steadily. “Now, China has increased its production and become Number One by a wide margin. Kenya has also emerged as a large producer and Sri Lanka has consolidated its position,” Bhatia said.
The secretary exhorted the producers to focus on quality and value addition in exports.
A recent study by consultancy BDO had noted that Sri Lanka exports about 60 per cent of tea in value added form (packet tea and tea bags) compared with a mere 15 per cent by India, mostly driven by strong brand Dilmah.
Tea Board deputy-chairman Saurav Pahari, who also joined the AGM virtually from Calcutta, urged producers to focus on brand building and move up the value chain. He also suggested that the century old tea industry collaborate with start-ups for fresh ideas.
“They have new, fresh and out-of-the-box ideas that the traditional tea industry can profit from and start-ups can also profit from the experience that the traditional industry brings to business,” Pahari said.
Indian exports stood at 231 million kilogrammes in 2022, mainly on the back of gains in the CIS and UAE markets, Nayantara Palchoudhuri, ITA chairperson, observed in her opening remarks. She said exports were constricted by lower off-take from Iran and competitive pressure from Kenya (CTC), Sri Lanka (orthodox), Indonesia and Vietnam, who all have lower costs of operations.
Increasing exports by strengthening India’s footprint in traditional overseas markets and exploring newer markets were listed by Palchoudhuri as key action areas going forward.
While speakers focused on various issues, veteran tea planter and industrialist Chandra Kumar Dhanuka raised his voice, literally, during the meeting trashing the suggestion on value addition.
Pointing out the precarious condition of the industry, sandwiched between falling prices and rising costs due to higher wages, he demanded that the Centre should notify a floor price.
“We are all sidestepping the main issue. Industry is bleeding due to low prices. There must be a floor price, on a par with production cost, to save the industry,” Dhanuka told this newspaper.
He said prices of CTC and orthodox tea in the Guwahati auction up to date this year are down Rs 12 a kg and Rs 108 a kg from a year ago.
