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Crash pangs over, tea industry looks forward to boom

Guwahati, Dec. 26: The cup that cheers could be saying “three cheers” to 2008, a year that holds the promise of a return to the “golden days” for Assam’s tea industry.

“Just one more good season and the industry will be back to its golden days,” the Tea Board’s executive director for the Northeast, Chiranjit Saikia, said.

With business steadily improving in the past three years, 2008 will be crucial for the industry since good price realisation for just one more year is what the Assam tea industry needs to get back on the rails.

Echoing Saikia, the chairman of North East Tea Association, Manoj Jalan, said the industry had expected the turnaround a couple of years ago.

“Anyway, the demand-supply equilibrium has now been restored. Next year will be crucial,” Jalan said. “As of now, we can say the industry has outlived the crisis and in the process we have learnt a lesson or two.”

Spiralling production costs and a demand-supply imbalance had pushed the tea industry into a crisis in 1999, leading to labour unrest in several gardens across the state. Although exports have not really climbed, the process of recovery is well on course.

The demand for tea has gone up in the last few years, as have prices. The average price at the Gauhati Tea Auction Centre has been about Rs 75 per kg this year.

Sources at the auction centre said they would not be surprised if the average closing price this year hits Rs 80. The last time prices went up to Rs 80 per kg at the auctions was in 1998, before the slide began and prices plummeted to Rs 60-65 per kg on an average.

One more reason why the industry is pinning its hopes on 2008 is that the export of Assam tea is also expected to go up next year.

“Many international buyers had shown keen interest in Assam tea during the recently-concluded international tea convention. We are hopeful that these buyers will import more Assam tea,” Saikia said.

Raj Baruah, chairman of the Assam Tea Planters’ Association (ATPA), could not readily tag 2008 as the year of boom, but sounded hopeful about the current trend. “The market has stabilised. It is good news for the industry.”

J.N. Baruah, secretary of Tea Association of India (TAI), too, sounded optimistic. “Going by the current trend, the next year looks promising,” he said.

Addressing the India International Tea Conference in Guwahati last month, Union minister of state for commerce Jairam Ramesh advised the industry to first “get rid of the Bada Sahib mentality”. He told a congregation of industry captains and delegates from several countries that the industry must change its style of functioning to keep pace with the competition.

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