Slow growth in domestic consumption, rising food inflation and slow recovery in exports after the Covid pandemic are the major challenges facing the tea industry. An official of the Federation of All India Tea Traders Association said this. Tea producers associations and Tea Board India are concerned about slow demand growth in the country. Federation of All India Tea Traders Association (FAITTA) President Sanjay Shah said during its 10th Annual General Meeting on Saturday evening that as retailers, we are closely watching the market activities. The rising level of food inflation also remains a matter of concern, as it has an adverse effect on consumption.
This is the effect of inflation
Shah said, “High inflation in essential commodities adversely affects the demand for non-essential commodities. Even in essential commodities, consumers may turn to low-priced non-premium products.” The FAITTA chairman also said that there are concerns about the market’s ability to bear several rounds of increase in tea prices. This increase has become inevitable given the sharp rise in prices of key raw materials last year. He said that with some improvement in demand from the pandemic period, average prices in 2022-23 were Rs 180 per kg. Shah said that in 2022, there was a boom in the ‘Orthodox’ (open) tea market, as the situation in Sri Lanka turned in India’s favour. However, tea prices slowed down in 2023 due to export pressure.
Exports are increasing
He said, “The situation has changed significantly in 2024. Looking at North Indian combined leaf and ‘dust’ tea rates, prices are about 46 per cent higher than the corresponding level of last year. Shah said that tea production stood at 139.3 crore kg in the year 2023. Whereas in 2022 it was 136.6 crore kg. He said that after remaining at the level of 25 crore kg for several years, exports declined in 2020 and 2021. After that there has been some improvement in it. Exports stood at 228 million kg in 2023 as against 231 million kg in 2022. Shah said that after several years of stagnation, Indian tea exports are on the path of high growth.