The Telegraph
Since 1st March, 1999
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Tea output seen at 822 m kgs

Calcutta, Sept 2 (PTI): The Indian Tea Association (ITA), the apex body of tea growing corporations in the country, has predicted a gloomy picture for the tea industry, at present in the grip of a recession.

In a status paper ‘Indian tea scenario’ released today, the association predicted that the production of tea during 2002 would plummet to 822 million kilograms compared with the previous year’s figure of 854 million kilograms. This lower production would be coupled with stagnating exports, which had been pegged at the 2001-level of 180 million kilograms, and a meagre 3 per cent rise in internal consumption from 673 million kgs in 2001 to 693 million kgs in 2002.

The status paper said the sluggish demand in the domestic market as well as lower prices had become a major concern for the industry.

On the export front, the ITA paper said the shift of producers from the orthodox variety to CTC had resulted in a loss of market share in overseas countries, particularly Russia, where India’s exports fell by 20 per cent. Other reasons cited for lower exports were poor offtake by traditional markets like UK, Germany, Poland, Libya and Turkey, besides stiff competition from countries like Kenya, Sri Lanka, China, Indonesia and Vietnam.

Further, the ITA said the removal of quantitative restrictions from March 2001 had led to a surge in imports despite the lower prices prevailing in the country. To boost domestic consumption, the tea industry, in association with the Tea Board, has decided to launch an intensive campaign to promote the tea drinking habit among the youth.

However, the ITA has doubts over the correct growth pattern on domestic consumption, as studies by the Indian Institute of Management, Calcutta, and ORG-MARG showed different results. While IIM-C estimates showed internal consumption in India would grow by 3 per cent per annum, ORG-MARG estimated it at 2 per cent annually.

With these variations in estimates, ITA said that it was difficult to arrive at a correct consumption figure for the industry as a whole. The ITA paper also warned that the downward pressure on prices would threaten the survival of the tea industry as substantial quantities were being sold below the cost of production.

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