A lockdown because of Covid-19 and closure of tea estates during majority of the plucking season could lead to a crop loss between 10 and 25 per cent for the industry, this year. Estates have been closed during the peak plucking season of first flush crop generally beginning March.
While Darjeeling will lose 25 per cent (approximately 2 mkg) of its total production, which stands at around 8 mkg, the crop loss in Assam and West Bengal put together is estimated to be close to 8-10 per cent.
Assam opens estates
The Assam government on Friday allowed tea estates to reopen with 50 per cent of the staff. So gardens can start plucking activities from Saturday or Monday (depending on the area of operations).
The West Bengal government on its part has allowed gardens to reopen with only 15 per cent of the labourers, primarily for skiffing or pruning of overgrown bushes. Orders in this regard have already been issued, State Chief Secretary, Rajiva Sinha, said.
“Tea gardens can start skiffing operations and necessary orders have been issued. They will have to operate with 15 per cent of the labour force, maintain social distancing and also ensure sanitization of premises,” he said.
While this will help gardens level bushes and keep them ready for plucking season, it may be difficult to arrest crop loss if plucking does not commence within the next two-to-three days.
The Centre has been asking West Bengal to re-open tea gardens for some time now. The decision was delayed in view of Covid-19 cases arising out of the north Bengal districts of the State.
Trouble brewing for Darjeeling tea
According to Binod Mohan, Chairman, Darjeeling Tea Association, it might be difficult to retrieve the first flush crop, which accounts for nearly 25 per cent of the annual production there. First flush stood at 8 million kg (mkg) last year.
The Darjeeling tea industry, which has been facing troubles ever since the four-month long agitation in the hills by the Gorkha Janmukti Morcha (GJM) in 2017, is worried that the current loss in production could have a long-term impact on demand.
Nepal tea, which has been competing with Darjeeling tea, has made steady in-roads into some of the markets such as Japan. These markets had been buying Indian Darjeeling tea, earlier.
“We have not been producing. But production in Nepal is still on. There is a big risk of Nepal tea substituting Darjeeling tea in some of the overseas markets,” Mohan told BusinessLine.
North Indian tea production
North India, which accounts for nearly 83 per cent of the country’ total production, is set to lose 8-10 per cent of the crop this year.
In March alone, the industry lost around 50 mkg of crop as plucking activities came to a grinding halt. In April again, the estimated loss in crop is close to 35-40 mkg, said Vivek Goenka, Chairman, Indian Tea Association.
“We are likely to lose close to 100 mkg of production this year. There is not much tea in the pipeline either,” Goenka said.
“We have been getting good demand China and Iran but we have not been able to supply. The demand-supply situation in the Indian tea industry is expected to be better and we expect price to firm up moving forward,” he further added.
With not much of tea in the pipeline and with production yet to commence across various estates, there is likely to be some supply side issues over the next one month or so, said Jagjeet Kandal, Managing Director, APPL.
Mere opening up of gardens would not help address the woes of the Indian tea makers, who have already been reeling under the pressure of higher costs outstripping realisation. The auction system and other ancillaries such as sampling and courier services have to commence in order to send teas for sampling to big buyers, which is usually the practice.
Auctions have been closed since the third week of March.
“There is no cash flow for the last four months but we are having to pay wages, ration etc. So all gardens are facing severe cash crunch,” said Sujit Patra, Secretary, ITA.