GUWAHATI, June 24 - The tea industry is heading for a major crisis in the face of heavy crop loss during the season. The Tea Association of India (TAI) estimates that the crop loss for the period March-June this year is likely to be approximately 132 million kilograms in North India (Assam and West Bengal).
Out of this estimated decline, orthodox production is expected to drop by 12-14 million kilograms. The export levels are also likely to witness a drop by 10-15 per cent at around 225 million kilograms.
While the crop loss up to June is 32 per cent, auction arrivals are lower by 59 per cent.
�These are grim pointers to the health of the industry as less of crop translates to more overheads in term of fixed cost. The crop and market outlook for the tea industry at this point of the season looks bleak, in the aftermath of prolonged period of lockdown,� TAI president Raj Bansal said.
�The industry is heading for a major crisis because loss suffered in terms of crop till date and the prospects of recouping in the coming months is difficult on the face of massive rainfall reported from North Indian tea growing regions, both in Assam and West Bengal,� he added.
The rainfall of above 400 mm in the month of May (100 mm more than the corresponding period of 2019) is bound to impact the availability of crop in the coming months, the planters association felt.
�The tea industry in North India now has to face the twin challenge of how it meet and balance production targets while managing operation of the gardens in the face of additional operative costs in coping with challenges posed in combating COVID-19,� industry sources said.
TAI has urged the Tea Board to hasten up the process of disbursing the pending subsidy in these times of financial stress. The subsidy component is 25 per cent of the total amount spent by the garden on Tea Board�s developmental works.
The industry had committed almost Rs 1,200 crore for such developmental work for which the subsidy works out to be roughly Rs 400 crore.
The industry has been pushing for release of the subsidy component for quite some time and the Tea Board has been able to release only a portion of it.
�But amount in some cases going back to past five-year period (12th Plan, etc.) remains pending and hence, the association craves for its release which shall go a long way in providing some succour to the industry in these times of stressed financial conditions,� the association said.