According to a joint report by ASSOCHAM East and ICRA titled “Tea Industry at the crossroads,” while FY2021 proved to be one of the best years in recent times for the bulk tea industry, sustainability of the same appears unlikely in FY22.
As labour wages have been increased effective February 1, 2021, production returning to largely normal levels has led to pressure on prices. Consequently, the industry is likely to face another challenging year in FY22.
Hence, for the long-term sustainability of the industry, tea prices must consistently remain materially higher than the cost of production, said Manish Dalmia, chairman of the ASSOCHAM Tea Sector Council East.
“The changing dynamics in the tea sector call for greater collaboration between various stakeholders to transform the tea industry and make it more sustainable and environmentally friendly.” ASSOCHAM and ICRA endeavour to facilitate dialogues and partnerships to build a strong economic agenda. We will continue to create platforms to facilitate cross-industry engagements, “he added.
While Kaushik Das, Vice President of ICRA, said that he is confident that the report that has been released, will benefit the tea industry, which is amongst the foremost revenue as well as wage-earners for the country. And this knowledge report, while providing an analysis of the relative position of the Indian bulk tea industry, particularly that based 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.
The tea industry has had a significant impact on the economy of this region and continues to play an important role in the livelihood of millions of people. 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.
Globally, the tea sector is undergoing change; climate is fast emerging as a critical factor impacting Indian tea. Another aspect is balancing the human element with modernization and technological adaptation for quality production.