Tea body urges for measures for equilibrium in demand and supply

The Tea Association of India (TAI) on Sunday said supply outstripping demand is a major cause for the problems facing the tea industry in the country.

It also spelt out various measures to correct the situation, including the need to increase domestic consumption of the beverage.

In a submission before Union Industry and Commerce Minister Piyush Goyal here, TAI president Ajay Jalan said supply outstrips the demand and it is one of the root cause of the problem.

"We have to regulate supply and create demand for tea," he added.

Advocating for promotion of tea consumption, he pointed that per capita consumption of tea in India is as low as 830 grams per head/year as compared to 1.61 kg per head in the UK or 1.01 kg per head per year in Pakistan.

"An increase of even by 100 gram per capita consumption would lead to consumption of another 131 million kg annually," Jalan added.

He said there is a need to promote tea as a super food/beverage highlighting the immense health benefits of tea.

He urged the government to allocate funds for generic promotion of tea and entrust this promotion to a professional agency.

Jalan further said another way to regulate supply is by curbing the import of tea to India.

He said out of 69.35 million kg imported in last three years, only 23.43 million kg were re-exported, and the rest 36.92 million kg were retained in India for domestic use.

"This imported tea creates additional pressure on demand-supply equilibrium in the domestic market leading to further economic un-sustainability of tea industry," he added.

To check import, the TAI suggested imposition of minimum import price, anti-dumping duties, vigorous implementation of the laws of the land related to FSSAI regulations on origin, food safety, sanitary and phytosanitary regulations, etc.

The Association further requested the Union minister to invoke provisions of Tea Act and Tea Control Order 2003 to devise a scheme that would determine a remunerative price for the industry which may be charged by growers or manufactures linked with specified quality.

The TAI also raised the issue of reduced export to Iran, with the amount coming down from 53.70 million kg in 2019 to 33.37 million kg last year.

"This state of affairs has arisen due to payment related issues and this needs resolution so that India can maintain its foothold on Iranian export front," it added.

The issues related to logistics were also put forth by the Association, including unavailability of containers.

It also called for measures to reduce dependency on the road transport mode as it consumes maximum cost of logistics.

Besides making a verbal submission before Goyal, the TAI president also handed a written note on the issues raised by the organisation.