The Indian Tea Association (ITA) has estimated revenue losses of Rs 2,100 crore for the tea industry. Recorded in Assam and West Bengal, these losses are for March, April and May.
For these two states, the total loss of production in these months will amount to approximately 140 million kgs. The estimated revenue loss will amount to Rs 2100 crore, based off of 2019’s North India auction prices.
The COVID-19 lockdown has increased financial stress on the tea industry. In the last five years, input costs have risen, however, there has been no relative rise in prices.
Thanks to the lockdown, the ITA estimates a production decline of 65% in Assam and West Bengal as of March-April. In May, the estimated decline is of 50%.
Apart from distribution issues, operational problems have also risen because of the decreased deployment of the workforce.
The ITA has urged the Ministry of Commerce and state governments of Assam and West Bengal to extend financial packages to the tea industry. This package should ideally include interest subventions, hike in working capital limits and reliefs in payments of electricity charges and PF dues.
As for the export font, the ITA said there is a strong demand for Assamese tea with inquiries coming in from Iran, Russia, UAE, and Europe.