Saturday, July 13, 2024

Shortfall in tea production: Acute problem of liquidity in the industry


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Guwahati. June 19 : The Production figure of North Indian Tea Industry reflects a precarious state of affairs in the industry, consequent to the constant onslaught of insufficient rainfall and excessive heat, hampering production of the crop to a great extent during the current cropping season up to the month of May 2024.

The data released by Tea Board of India’s indicates a drop of production of around 8% in Assam and around 13% in West Bengal up to the month of April 2024 as against last year during the same period, according to a Press communique issued by  the President of Tea Association of India (TAI), Sandeep Singhania.

Due to lack of rainfall and high temperature the tea growing regions of West Bengal and Assam has witnessed significant wilting of tea bushes, which indicated a further crop loss in the coming months. As reported by the member Tea Estates of the Association, the Tea estates of Assam and West Bengal is estimated to be behind by around 20% and 40% respectively during the month of May 2024 as against last year.

The data published by India Meteorological Department for the period 1st March to 31st May has shown significant less rainfall in the tune of 50% to 80% in the major tea growing districts of West Bengal and 10% to 30% in Assam as against normal rainfall received by the districts during the same period.

Since tea is a rain-fed crop, not receiving sufficient rain during these important months hampers the production of its premium first flush and second flush during this time and loss of crop during this period will severely affect the cash flows of the Companies.

The much awaited rainfall was finally received in the tea growing districts of Assam and West Bengal with the southwest monsoon reached sub-Himalayan West Bengal and North East India on 30th and 31st May 2024 respectively covering most parts of both the states, nearly a week ahead of schedule.

Post the onset of monsoon; both the States have witnessed profuse rainfall during the first fortnight of the month of June and as per the data released by India Meteorological Department the Tea growing districts of West Bengal and Assam have already received 15- 66% and 3-20% more rainfall respectively compared to normal rainfall for the month.

Excessive rainfall coupled with practically no sunshine during the day has again hampered the crop production in both the States. As reported by most of the member Tea Estates, the production in the state of West Bengal is behind by 25%-40% and in Assam around 10-15% as against last year during the first fortnight of June 2024. The combined fall in the Tea production till the end of June 2024 is projected to be less by around 60 million kgs in North India as compared to the corresponding period of last year.

The crop that has been lost is primarily of the first and second flush – which are the best quality teas for the year is definitely going to impact the revenue of the producers for the year.

With the natural circumstances beyond one’s control, the Tea industry in both Assam and West Bengal is looking at an ill-starred future in the days to come and increase in essential inputs including wages and outflow on account of higher bonus in near future will put a death nail to the tea industry of North India.




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