• Wed. Jun 19th, 2024

Tea Industry bullish for growth, despite 2022 likely to be a challenging year: Report

Kolkata, 9th December, 2021: ASSOCHAM East and ICRA released a joint report titled ‘Tea Industry at the cross roads’ at an event held today. The report takes a look at the strengths and challenges of the sector, from procurement, processing to marketing and other value additions. The report also contains insights on the growth strategies and prospects of the sector.

Speaking at the report launch, Mr. Manish Dalmia, Chairman ASSOCHAM Tea Sector Council Eastsaid, “Thechanging dynamics in the tea sector calls for greater collaboration between various stakeholders to transform the tea industry and make it more sustainable and environment friendly. ASSOCHAM endeavors to facilitate dialogues and partnerships to build a strong economic agenda. We will continue to create platforms to facilitate cross industry engagements. I am confident that the report released today will benefit the Tea industry which is amongst the foremost revenue as well as wage- earner for the country”.

While FY2021 proved to be one of the best years in recent times for the bulk tea industry, sustainability of the same appears unlikely. While labour wage has been increased effective end-February2021, production returning to largely normal levels has led to pressure on prices. Consequently, the industry is likely to face another challenging year in FY2022. Hence, for the long term sustainability of the industry, tea prices must consistently remain materially higher than the cost of production.

Commenting on the release of the report during the event, Mr. Kaushik Das, Vice President ICRA said, this knowledge report while providing an analysis of the relative position of Indian bulk tea industry, particularly thatbased out of North India, in the global tea industry highlights some key success factors that could lead to an improved financial performance of the industry on a sustainable basis.

Mr Ravi Agarwal, Chairman ASSOCHAM East said, “Tea Sector has had significant impact on the economy of this region and still plays a major role in terms of livelihood of millions. To ensure sustainable growth for the sector, we must look at the changing dynamics, future global trends and availability of local support to enhance productivity. I am sure this report prepared with ICRA as knowledge partner will go a long way in fostering a balanced social and economic growth for this important sector.”

Mrs Perminder Jeet Kaur, Director East, ASSOCHAM stated that the study shall help identify factors essential for sustainable growth of the sector. Globally Tea Sector is undergoing change; climate is fast emerging as a critical factor impacting Indian Tea. Other aspect is balancing the human element with modernization and technology adaptation for quality production.

The bulk tea industry has to cope with continued rise in labour cost over the decade while prices of teas have largely remained flat. Increased production small tea growers has led to pressure on prices of tea as export stayed in range. This has led to a decline in operating profitability of bulk tea players to 2% in FY 2020.

Leave a Reply

Your email address will not be published. Required fields are marked *

WP Twitter Auto Publish Powered By : XYZScripts.com