Tea Board panel recommends minimum sustainable price for tea; industry associations welcome move
India produces nearly 1,350-1,400 million kilograms of tea annually, and the small tea growers account for nearly 55 per cent of the country's total production.
A 10-member committee, established by India's Tea Board, has suggested the implementation of a Minimum Sustainable Price (MSP) for tea. This move is intended to tackle the growing disparity between production costs and market realisations in the country's tea industry. Industry associations have expressed support for the proposal, highlighting the importance of a sustainable pricing system to provide fair returns to tea producers and safeguard the interests of small tea growers, ensuring the industry's long-term viability.
The Indian Tea Association, Tea Association of India, United Planters Association of Southern India, Confederation of Indian Small Tea Growers Associations and Federation of Indian Tea Manufacturers Association all endorsed the move.
India produces around 1,350-1,400 million kilograms of tea each year, with small tea growers contributing to nearly 55% of the country's total output. According to the associations, tea prices have seen a modest compound annual growth rate (CAGR) of 2-3%, in contrast to the estimated CAGR of 10-14% in input costs, leading to a financial strain on producers.
CK Dhanuka, chairman of Dhunseri Tea and Industries, noted that the industry is experiencing mounting cost pressures while tea prices have remained relatively stagnant. He emphasized that a sustainable pricing framework is crucial to bridge the growing gap between production costs and market realisations and ensure the industry's long-term sustainability.
The committee has proposed using a composite index reflecting wage movements and the Consumer Price Index (CPI) to determine a benchmark MSP. Regular reviews of the benchmark are also suggested to maintain alignment with changes in production costs and inflation. The key benefits of a Minimum Sustainable Price for the tea industry are expected to include accommodating future wage increases, enhancing financial viability and sustainability, supporting small tea growers and registered tea gardens, encouraging quality improvements, and strengthening India's tea exports.
Written by urgent.news from Hindustan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
