Despite COVID shock, large section of tea arena is optimistic

Economy


SILIGURI: Two months long lockdown has caused over Rs 2 k crore loss in tea production in Assam and Bengal. But a large section of the green beverage arena is highly optimistic and foreseeing price correction, increased export and overall demand to come as reviver for the labour intensive industry.

“The deployment of workforce came as an unbearable challenge and caused extensive production loss,” said PK Bhattacharjee, secretary general of Tea Association of India(TAI). Another major planters organization Indian Tea Association(ITA) estimated this loss to be of around Rs 2100 crore for March April and May.

“But not everything is lost yet. We also have Silver linings,” says a large section of tea arena.

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“Due to the closure of production from December, 2019 mandated by Tea Board, the carry over stock this season has been much less. This combined with the loss of production during the lock down is expected to correct the demand-supply imbalance to some extent,” said senior ITA members.

Sign of this correction is clearly visible. Average price (per kg) in Siliguri auction in weeks ending May 2nd, 9th or 16th remained Rs 204, 209 or 188 respectively against Rs 147, 149 or 140 in corresponding weeks last year. Scenario in all other auction centres of the country also remained similarly bright.

“This sudden spike is encouraging. But the ground level demand supply gap, low lifting by the buyers, variation in quality all these factors all played role behind this. So, we should not take it as long lasting factor,” said Bikash Shrivastav, Executive Director in renowned global scale tea auction house Parcon India Pvt Ltd.

“We are optimistic on the Export front. There is strong demand for Assam as well as Bengal tea from Exporters from Iran, Russia, UAE and Europe. Transportation logistics are also gradually taking shape to facilitate export,” said tea exporter Ankit Lochan.

“Overall, global demand should remain robust. Known immunity boosting capacity along with affordability of tea will give it a continuous buoyancy,” added Lochan.

However, “Situation is tight. But we can turn around by utilizing every possible opportunity,” said Bhattacharjee.



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