Assam tea industry is facing financial crisis

Guwahati: A severe financial crisis has crippled the tea industry in Assam. Low prices coupled with a decline in production and rising costs of key inputs in 2023 have exacerbated the financial crisis

Most of the tea companies are facing shortage of working capital. According to sources, the financial crisis has turned into tension in some tea gardens in the state as workers want 20 per cent bonus in one installment on the eve of the festive season. On the contrary, a section of the park management facing crisis wants to pay the bonus in two installments.

• Ban on plastic water bottles up to 500 ml in Assam According to ITA (Indian Tea Association) sources, tea prices have increased at a compound annual growth rate of about four per cent over the last decade, while the cost of the product has remained significant over this period. There has been an increase of 9 to 15 percent in inputs like coal, gas, sulfur etc. during this period.

, While tea prices have remained stable, the wages of tea garden workers have increased significantly over the past five years. According to sources, there has been an alarming decline in tea prices in 2023 compared to 2022 levels.

In the organized sector, CTC/dust auction prices for Assam declined by Rs 12.49 per kg. Compared to 2022, tea production in the Brahmaputra valley has declined by 1.09 per cent, and in 2023 the decline in Barak valley will be 5.91 per cent.

• Assam government asks teas to pay bonus as soon as possible, ITA sources said From January to August 2023, tea production in Assam declined by 5.42 million kg due to adverse weather conditions, while that in West Bengal by 4.06 million kg. There was a decline of million kilograms. According to ITA sources, the outlook for tea exports in 2023 appears grim as shipments to Iran remain uncertain. Iran market accounts for 20 percent of India’s total tea exports. The continuous decline in tea shipments to Iran since 2020 due to payment issues is putting financial pressure on tea exporters and adversely impacting the demand-supply balance in the domestic market.