Assam tea industry reels under uptick in production cost

Assam's tea industry has been reeling as the cost of production has been surpassing prices. The North East Tea Association (NETA) has appealed to the state government to take immediate action to ensure better price realization.

Guwahati: Assam's tea industry has been reeling as the cost of production has been surpassing prices. The North East Tea Association (NETA) has appealed to the state government to take immediate action to ensure better price realization. The Association said the government's inaction will lead small tea growers to further struggle for survival.

NETA Chairman Sunil Jalan said that the average price realization of CTC tea at the Guwahati Tea Auction Centre (GTAC) this year between April to July is Rs 208.02 per kilogram which was Rs 252.21 per kilogram during the same period last year. (CTC tea is the black tea processed from the green tea in a factory)

Jalan said that the unsold quantity at the GTAC is more than double compared to last year. "While the unsold quantity was 16.367 per cent last year, the figure has increased to 35.16 per cent this year," he said. He also added that although the government has taken steps like announcing special incentives to the industry and exempting the green leaf cess for three years, there is a need to ensure better price realization.

"The price realization of tea is lower by Rs. 44.19 per kilogram, which is about 18 per cent lower than last year. On the other hand, the cost of production has increased due to hike in wages and inputs," said NETA Advisor Bidyananda Borkakoty. He added that the cost of production has gone up by Rs. 25 per kilogram of tea due to the recent hike in daily wages from Rs. 167 to Rs. 205. "Apart from this the cost of production has also gone up by Rs. 7 per kilogram due to an increase in the cost of inputs like fertilizer, pesticides, diesel, natural gas, coal etc," he said.

Price realisation is theaverage selling price per unit of the product/commodity for the business.