North Indian tea industry faces crisis as auction prices drop 17% amid production challenges
Tea Association of India said that the auction Price figures of North Indian Tea Industry recently reflect a precarious state of affairs in the industry, coupled with the onslaught of flash floods, excessive heat and severe pest and disease infestations hampering production of the crop during the current cropping season.
Guwahati: The tea industry in North India is currently facing a severe crisis, according to the Tea Association of India (TAI). Auction prices have plummeted by 17%, raising grave concerns about the industry's sustainability. Shailja Mehta, President of TAI, highlighted the adverse impact of flash floods, extreme heat, and severe pest and disease infestations on tea production during the current season.
The recent decline in auction prices is evident in a granular analysis of sales data for the financial year 2026-27. Auction prices at three major tea auction centers - Kolkata, Guwahati, and Siliguri - have witnessed a significant downturn. The average CTC sale price in Kolkata dropped from Rs. 291.27 in Sale no. 26 to Rs. 238.77 in Sale no. 34, representing a 17% decrease. Similarly, Guwahati experienced a 15% drop, and Siliguri saw an 8% decline in auction prices over the same period.
The TAI President emphasized that the decline in auction prices cannot be attributed to oversupply. While tea production in North India saw a marginal increase of around 16 Mkgs (5%) compared to the previous year, the production was adversely affected by severe flood in Assam and excessive heat along with pest infestations in other tea-growing regions of North India. As a result, the crop production is estimated to drop by around 8 Mkgs in North India by the end of this month as compared to last year.
The outlook for the tea industry is particularly bleak in Assam due to submerged tea bushes that will take time to recover from the recent flood. Moreover, the industry is also facing challenges in the export sector, with a 23 Mkgs (18%) decrease in exports compared to the previous year, according to the Tea Board's official figures for the January-June period.
The combination of plummeting auction prices, higher essential inputs, and increased bonuses paints an extremely despondent picture for the future of the tea industry in Assam and West Bengal.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
