The domestic tea industry, which was showing some signs of recovery this year after a long spell of recession since 1999, has been pushed back into gloom by the ongoing global economic slowdown.
The rising trend of tea exports has started showing some reversal in the last two months.
Export volumes were climbing this year and had reached 156 million kg by October. But since then, demand for tea in Western nations and Russia has declined, said Sashank Prasad, president of the Tea Association of India (TAI), while addressing its 29th annual general meeting at Jorhat in Assam.
“So far, this year has been better than last year, especially after the long and unprecedented recession in the tea industry. But, it is too premature to reach a sustainable level. The initial gains in the auctions could not be maintained afterwards due to the global economic meltdown in general, and the slowdown of tea exports in particular,” Prasad said.
In 2007, India produced 945 million kg of tea and exported 179 million kg. This year, the production, as per latest reports up to October, registered 833 million kg. It is estimated that the season would end at around 965 million kg, a little higher than 2007.
Moreover, due to the fall in exports, there was oversupply in the domestic market, due to which the domestic prices remained under pressure in 2008, said Prasad.
Further Prasad made the startling revelation that due to scaling up of production levels in countries like China, Turkey and Indonesi, it has been observed that world supply of tea has been far outstripping the demand and this oversupply stands in the way of remunerative price realisation.