Guwahati. Slow growth in domestic consumption, rising food inflation and slow recovery in exports after the Covid pandemic are the major challenges facing the tea industry. This was said by an official of the Federation of All India Tea Traders Association. Tea producers’ associations and Tea Board India are concerned about the slow demand growth in the country. As retailers, we are closely watching the market activities, said Sanjay Shah, president of the Federation of All India Tea Traders Association (FAITTA) during its 10th annual general meeting here on Saturday evening.
Rising food inflation also remains a matter of concern as it has an adverse impact on consumption. “High inflation in essential commodities adversely impacts demand for non-essential commodities. Even in essential commodities, consumers may turn to lower-priced non-premium products,” Shah said. The FAITTA chairman also said there are concerns over the market’s ability to withstand multiple rounds of price hikes in tea. These hikes have become inevitable given the sharp rise in prices of key raw materials last year.
With some improvement in demand from the pandemic period, average prices were at Rs 180 per kg in 2022-23, he said. Shah said that in 2022, there was a boom in the ‘orthodox’ (loose) tea market as the Sri Lanka situation turned in India’s favour. However, tea prices remained sluggish in 2023 as export pressure remained. “The situation has changed significantly in 2024. Looking at North Indian combined leaf and ‘dust’ tea rates, prices are about 46 per cent higher than the corresponding level last year,” he said.
Shah said that tea production stood at 139.3 crore kg in the year 2023. Whereas in 2022 it was 136.6 crore kg. He said that after the export remained at the level of 25 crore kg for several years, it decreased in 2020 and 2021. After that there has been some improvement in it. Exports stood at 22.8 crore kg in 2023 as against 23.1 crore kg in 2022. Shah said that after several years of stagnation, Indian tea exports are on the path of high growth.
