Prices of CTC tea and dust have crashed in the auction centres of Calcutta, Guwahati and Siliguri with supply outstripping demand, hitting the bottomlines of organised tea estates in particular.
Data compiled by Indian Tea Association, the body of tea garden owners, showed prices are down by ₹32-74 a kilo from end June onwards with a sizeable amount (over 30 per cent) going unsold at the auction.
While small tea growers in the unorganised sector have been able to balance the loss in value with higher volumes, the organised players witnessed flat crop production, falling in the vortex of lower value and volume.
Provisional Tea Board data for January-June 2025 showed Bengal and Assam registering a growth of 27 per cent and 4.66 per cent, respectively, over the same period in 2024.
“However, a closer look reveals a more concerning trend among large tea estates (registered tea gardens). In reality, these estates saw only a marginal 0.51 per cent increase in Bengal and a 0.86 per cent decline in Assam compared with 2024 levels,” ITA secretary-general Arijit Raha observed.
The association said urgent government intervention is required to salvage the situation. “A minimum sustainable price has become extremely imperative to address the extreme price volatility,” Raha added.
“We are concerned about the perilous state of the tea industry in general and the organised sector in particular, with their high social costs. The industry is currently suffering from oversupply as growth in demand has not kept pace with the rapid increase in production. This increased supply is almost entirely due to the mushrooming of small growers in the past two decades,” said Kavi Seth, chairman of leading tea auctioneer J Thomas & Co.
A leading producer said the STG is producing tea at ₹50-70 a kg less than the organised players and consequently they are offering tea at a cheaper price.
“If production falls, imports start flooding in and keep prices in check. If production is up, prices come off again. I don’t see how the situation can be addressed,” the producer lamented.