Regulate demand-supply chain to boost tea sector: ITA tells Goel

GUWAHATI: Tea Association of India (TAI) on Sunday urged the Union government to regulate the demand-supply chain by curbing the import of teas in India.

The TAI said the supply outstrips the demand of tea in the country and this is one of the root causes of the problem.

In an interaction programme with Union minister for commerce and industry Piyush Goyal in Assam’s main city Guwahati on Sunday, TAI chairman Ajay Jalan said the country has witnessed a surge in imports of tea in the last few years to the extent that 60.35 million kg of tea imported in last three years of which only 23.43 million kg were re-exported.

The rest 36.92 million kg were retained in India for domestic use. The imported tea creates additional pressure on demand-supply equilibrium in the domestic market leading to further economic un-sustainability of the tea industry, Jalan said.

The status of tea in Darjeeling is much more acute as out of domestic production of 7.5 million kg, import of tea from Nepal touched almost 10 million kg, Jalan said.

“The tea Industry is Darjeeling is therefore gradually being wiped out and we fear a similar fate for ottea-growingwing regions of India if urgent action on implementation of all legal barriers is not taken to arrest this surge in import,” he said.

The TAI suggested the imposition of minimum import price or anti-dumping duties, vigorous implementation of the laws of the land related to FSSAI regulations on Origin, Food Safety, Sanitary, and Phyto Sanitary regulations etc.

“Per capita consumption of in India tea is as low as 830 grams per head per year as compared to 1.61 kg per head in UK. Even in Pakistan has a consumption of 1.01 kg per head per year. An increase of even to 100 gram per capita consumption would consume another 131 million kg annually,” he said.

“The pressing need of the hour is to create demand for tea by generic promotion positioning tea as a super food/ beverages highlighting the immense health benefits of tea. Such promotion shall only create equilibrium of Supply and demand leading to sustainable prices of our products,” Goenka said.

“We, therefore, urge the government to allocate funds for generic promotion of tea and entrust this promotion to a professional agency,” he said.

“Further, a fair remunerative price for Indian Tea has always been a challenge. As tea producers, we have almost no control over the cost of our products be it workers wages in this labour-intensive industry, be it workers’ productivity, be it vagaries of climate change, be it ever-increasing inputs costs of fertilisers, pesticides, energy etc but the price realisation of our produces faces the realities of market forces which does not even meet our cost of production,” he said.

“The Tea Act has sections to control price and distribution of tea or tea waste, and it has empowered the Central government to fix price. The association urged the Union government would urge the ministry of commerce and industry to invoke the provision of Tea Act and Tea Control Order 2003 to devise a scheme that would determine a remunerative price for the Industry which may be charged by the grower of tea or manufactures linked with the specified quality of tea.

Looking at the fact that the average rate of embedded tax as  percentage of the export sales price per unit for the tea industry works out to 6.23 percent the announcement made by the Centre for RodTep) rate of 1.70 percent as a percentage of FOB value for tea is needed calls for urgent revision. This is against the MEIS rate of 5 percent made available to the Tea Industry, the TAI chief said.

“The export of tea to Iran has been one of the bright spots for the Indian tea industry to the extent it touched 53.70 million kg in the year 2019 which has now been reduced to 33.37 million kg in the year 2020,” he said.

This state of affairs has arisen due to payment-related issues and this needs resolution so that India can maintain its foothold on Iranian export front, he said.

The TAI also urged the government to address issues related to logistic problems eg unavailability of containers, and bringing India to international bench mark related to transport mode where the share of road sector that is 60 percent as against 30 percent in other country is gradually in reduced. The road sector consumes maximum cost on logistics, he added.

The meeting was chaired by Union minister of commerce and industry Piyush Goyal in the presence of Assam industries minister Chandra Mohan Patowary.

The meeting was organised by the Tea Board India with support from the state government.

During the meeting Goel held interactions with all the stakeholders of tea sector including small tea growers, producers associations, bought leaf manufacturers association, Tea Research Association, exporters, warehouse associations and senior officers of the Centre and state governments.

During the interactions various issues impacting the cost competiveness and the long-term viability and sustainability of the tea industry were discussed towards realising the export potential and productivity, attaining the supply-demand equilibrium, ensuring sustainability and remunerative price for the producers.

Following detailed discussions, Union minister requested the stakeholders to submit an elaborate proposal concerning all aspects involving the various sectors of the industry so that it can be examined in depth for further action.

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