Oversupply prompts tea growers to bring small holders under export chain

Published on : April 05, 2019 Topic : Export

Oversupply of tea has led to drop in CTC prices by `30 a kg this year at the farm gate, although Orthodox prices were higher by `30 a kg this year, driven by higher demand for exports. “ We are carrying a 70 to 90 million tonne of excess tea production above the 50 MT being carry forwarded from last year,” Tea Board chairman Prabhat Bezboruah said.

He said between 2014 and 2018, growth in tea production had been more than 56% but small tea growers had been getting less than 6% of retail prices. For packers, tea prices have come down and prices at the farm gate have remained flat since 2012.

Although share of packaged tea in India has gone up to 678,000 tonne compared to China’s 576,000 tonne, price realisation by small tea growers has been drastically low.

The tea board stopped procurement in December and prices went up a bit. But, when it started procuring in January and February through e -auction, there was an oversupply situation and prices dropped, Vivek Goenka, chairman, Indian Tea Association (ITA), said.

He said the ITA was working with the tea board to create a balance between demand and supplies, however, the Board chairman said that exports needed leveraging and for that, small tea growers would have to be integrated to the export chain. Small tea growers contribute more than 47% to the total tea production. Bringing them under a quality control inititative would enable quality yield and integrate them to the export chain.

ITA and Solidaridad, Asia, have developed Trinitea, an android-based digital training tool for farmers seeking to provide all year round on training to improve agronomical, social and environmental practices.

“Under this programme, we will cover 70,000 small tea growers in India by this year and it would cover all the 1.3 lakh small tea growers in West Bengal and Assam by 2023,” Goenka said. India has targeted 300 MT by 2020 and this year-end, it envisages to export 250 MT.

While bringing small growers under a frame of exportable quality production is the target, generic promotion of tea is also one of the prime agendas to drive demand growth. ITA, involving the tea board, will start a social media campaign to popularise tea as beverage, Goenka said.

Solidaridad would invest `8 crore over three years to implement Trinitea and this programme would go beyond certification to a self assessment method. While China and Indonesia have accepted Trinitea, which will ensure quality tea exports to China and Indonesia from India, Solidaridad and ITA will also engage with Europe.

India is eyeing to export 15 MT of tea to China this year, while demand is coming from Iran and Indonesia. Around 30 MT of Orthodox tea was exported to Iran last year, Goenka said, adding the 786 gram per capita consumption in India has to go up.

Source: Financial Express
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