Financial strength of tea industry severely eroded: UPASI

United Planters Association of Southern India (UPASI) today said financial strength of tea industry has got severely eroded due to continuous and steep fall in prices, increase in labour wages and high input cost.
The current crisis is comparable to the darkest phase in the tea sector during the beginning of this century, UPASI President Vijayan Rajes said in a statement.
Tea was the only plantation commodity where there was no significant difference in the price levels between pre-crisis and post-crisis period, suggesting that industry was just about managing without any significant profits for the last many years, he added.

Though the central government in 2002 had allowed FDI up to 100 per cent in tea plantations with certain conditions, which were omitted in 2013 to attract FDI, but still no worthwhile FDI flowed into the industry, he said.
"This suggests that the financial strength of the industry is not conducive in attracting foreign investments," he added.
The industry is gravely concerned about the current price levels which had pushed it to a deep crisis affecting 3.65 lakh workers, 70,000 small growers and their families in South India.

Tea prices in South India during the calendar year 2014 have dropped by Rs 15.85 per kg vis-a-vis 2013, while during the current year, up to August, this trend continued as prices further dropped by Rs 6.08 per kg to reach Rs 80.42.

Besides, exports during the current calendar year (up to July) were down by 4.97 M.Kg, he said.
He pointed out that productivity has to increase if the tea sector has to survive and move forward.
"At the current price levels, plantations will have no option but to cut production costs by stopping all developmental works and cutting down on input costs which will in turn reduce the employment."
This being the plight of the industry, the workers must understand the graveness of the situation and in the best interest of this important agro-industry, all stakeholders are expected to cooperate so that this industry can tide over these difficult times.

UPASI also condemned any unlawful activities disrupting the estate operations when there were laid down procedures available for grievances, Rajes said, adding that the administration must also send a strong message to perpetrators of such activities so that they were not repeated.