Tea associations from India, China, Sri Lanka, Japan and Indonesia have formed the Asia Tea Alliance to create a sustainable agenda for the future of Asian tea.

The alliance was launched at Guizhou in China on Friday.

Indian Tea Association (ITA) chairman Vivek Goenka, who was present at the meeting, told The Telegraph that the ITA, China Tea Marketing Association, Sri Lanka Tea Board, Indonesia Tea Marketing Association and the Centre Tea Association of Japan would work together towards a sustainable tea industry globally.

“We have planned to work together to enhance tea trade, cultural exchange, technology exchange, global promotion of tea, enhancing global consumption of tea and creating a sustainability agenda for the future of Asian tea,” he said.

He said the one of the main issues haunting the tea sector was low prices.

Industry officials have been voicing concerns over sustainability of the industry due to low prices, which are not remunerative enough.

Goenka said price was the greatest concern of the industry at present. At a tea association meeting held in Jorhat recently, he had said, “While costs continue to increase, rise in prices has been marginal. In the last five years, the compound annual growth rate of input costs has been around 11 per cent but the corresponding growth in tea prices has been below 2 per cent. CTC prices were down by Rs 20 to Rs 25 in the auctions this year. There still seems to be an excess supply of tea in the system which is the primary reason for poor demand.”

Industry officials said rising wages was another concern and if prices of tea do not rise substantially to meet the cost of production, the industry would not at all be viable to operate. They said rapid increase in production but a much lower pace of increase in consumption did not augur well for the industry and this unhealthy demand-supply situation is a primary reason for poor prices in the auctions.

The officials said wage and employment cost constitute 60 per cent of the cost of tea production.

The Assam government has constituted the Minimum Wage Advisory Board to fix a minimum wage for the tea workers. Meanwhile, the government has notified an interim increase of Rs 30 per day in the wage, pursuant to which workers’ wage in the Brahmaputra Valley is at present Rs 167 per day.

“With the present challenges confronting the industry, any further increase in wage at the present juncture will make it extremely difficult for the Industry to sustain,” an official say.

Not only this, the procurement of ration for workers at a high cost from the open market continues despite the implementation of the National Food Security Act in Assam. This is an additional burden which the industry perforce has been incurring, they said.

“The Assam government has, under the chairmanship of the industries and commerce minister, constituted a cabinet sub-committee on tea to look into the various issues, including that of ration supply to the tea industry. We look forward to a positive response from the government which would bring about considerable relief to the industry,” an official said.