The tea industry is passing through a crisis of oversupply. Even in the international tea market, supply outpaces demand. Small tea growers are coming up in a big way in India and producing tea at a lower cost as compared to big tea producers. Arun Kumar Ray, IPS, Deputy Chairman, Tea Board, spoke to BE’s Kishore Kumar Biswas.
Q. What are the main problems faced by the Indian tea industry?
A. In India, tea production is high but consumption is not so high. There is a demand and supply mismatch. So for price stability, we are thinking of higher exports. But this is also not happening. Last year, 253 million kg were exported. This year (2018-19), it is almost the same.
Global tea production is also rising. Kenya, Rwanda, etc. are producing more amounts of tea. Tea is an old drink. But there are more drinks like coffee, coke, etc. which are substituting tea. Food and Agriculture Organization (FAO) also finds a slowdown of growth of demand for tea and the price is not rising due to oversupply in the world market.
Q. The tea producers, particularly the bigger ones in India, are displeased with the inadequate price recovery of their products. How can this be addressed?
This story is from the April 16-30, 2019 edition of BUSINESS ECONOMICS.
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This story is from the April 16-30, 2019 edition of BUSINESS ECONOMICS.
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