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Tea industry wants output regulation

  • 17/03/2019

  • The north Indian tea industry wants output regulation, as it is facing the challenge of oversupply, which is dampening prices.

    Vivek Goenka, the chairman of the apex industry body, the Indian Tea Association, said that production in India had risen more rapidly than consumption, leading to an ‘unhealthy demand-supply situation’.

  • According to a Crisil report, while tea production in India logged a compounded annual growth rate (CAGR) of 3.2% between 2012 and 2017, consumption increased by a mere 1.7% in the period. In 2018, global production rose by 60 million kg over the previous year. The FAO had projected a global price decline of 1.4% in nominal terms and by 3.6% in real terms over the next decade.
  •  the instance of Assam (which accounts for half of India’s tea output), saying that prices had increased by only 3% in 2018 over 2017.
  • For the north Indian industry as a whole, prices had not even increased 2% over the last five years when input costs rose 11%. 
  • the Board could stop poorer quality teas from entering the market by enforcing minimum quality parameters for green-leaf harvesting.