Table of Contents
IN NEWS
- Recently, Assam tea industry has come under severe stress with a rise in production costs and tea price stagnation.
- This has threatened the long-term viability of the sector.
- Assam tea industry which is 170-year-old, is now gasping for survival.
WHAT IS THE PROBLEM?
- Price stagnation
- Increasing labour and other production costs
- Mismatch between demand-supply
- High transaction costs
- Challenges for fair price discovery at the auctions
- Climate change problem
PRODUCTION
- According to the Consultative Committee of Planters’ Associations (CCPA), tea production in India has increased from 1,207 million kg in 2014 to 1,339 million kg in 2018.
LOW TEA PRICE
- The average tea auction price in Assam was Rs 150 per kg and all India price was Rs 130.90 per kg in 2014.
- The price marginally increased to Rs 156.43 in Assam and Rs 138.83 in India in 2018.
WAGES
- The tea garden workers wages have increased by around 22% in 2018 in Assam.
PER CAPITA CONSUMPTION
- Per capita domestic consumption at 786 grams per year is low, compared to some other tea consuming countries.
PRODUCTION COST
- Secretary of Tea Association of India said, “The cost of production which includes fuel, coal, gas and fertilizer costs are becoming very expensive. As far as the realisation of cost is concerned, it has not improved in last almost 5 years.”
CONCLUSION
- Presently, Assam tea contributes 52% of total tea production in the country.
- However, the way this entire industry is facing a slowdown, it may face serious trouble in the near future.
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