After the mighty falls of the World’s biggest tea maker Magors, the Tata Tea is now the latest one to tumble as they have reported Rs 68.50 crore loss, sending the tea industry of Assam into a free fall. The Amalgamated Plantation Private Limited (APPL), a Tata Tea enterprise in its 12th Annual general meeting, has revealed that the loss was 140 per cent more than the previous year.
“We regret to inform this but that is the satiation. We produced 41.23 million kg against 41.99 million kg of last year but registered 140 per cent more loss” said the Chairman Ranjit Barthaklur in the AGM.
This is a very bad news as already the tea industry is completely under recession in Assam and many estate managers as well as staff have not been paid their monthly salaries for some time.
The Magors are already in selling spree while even Tatas have also made an effort to exit from Assam in 2018 but was stopped by the BJP government of Assam using political pressure.
The crisis in the tea industry is largely due to the demand supply mismatch, as the domestic demand have not increased although the production has grown and arrival of the small tea growers in a big way have altered the situation forever.
According to the latest Tea Board data, the Small Tea Growers (STGs) produce more than 51% of the entire Indian tea, which is also the second largest employers of India.
With World is completely moving towards the Orthodox and quality tea, the Indian tea is traditionally for volume centric and in the CTC category. Moreover about 40% of tea bushes are old; yielding low quality of tea whereas STGs are always blamed for supplying poor quality leafs.
The export market remain stagnant and has not been able to attract better price for lack of quality Tea, while domestic consumption growth is receding in comparison to coffee.
India’s per capita tea consumption is 0.78 kg per year against 3.2 kg in Turkey, 2.4 kg in Libya and 1.68 in the UK. These two factors have not pushed up the industry.
This has a very serious bearing on the STGs of Assam as big buyers like Magors have refused to buy and not being able to pay even last year’s due. This has put pressure on the ‘bought leaf factories’ pushing about 1,20,000 small tea growers of Assam into a corridor of uncertainty.
“With this rate, I feel extremely bad about the future for Assam tea. If Magors and Tatas are going down, it will take the entire Industry in Assam along with them. Unfortunately policy makers and intelligentsia of Assam have not woken up to the impending mega crisis” said Dinesh Bihani, President Tea Buyers Association of Assam.
“At this rate there is no future of the Tea Industry to thrive on . We have opened tea lounge in GTAC. This is an attempt to increase domestic consumption. The industry did not change for 120 years and now it is certainly to going down, burning all of us and to re-emerge from ashes” he said.
The dire consequences of that social implication in Assam would be even incomprehensible as one fifth of Assam’s population is involved in the only thriving industry for which the people of Assam are known to the world. The industry and the STGs need innovation to swim through the crisis and with due support from the stakeholders, specially state and central government.