Considering the COVID-19 outbreak and nation-wide lockdown, the tea industry in India is projected to lose around ₹2,000 crores and a crop loss of nearly 150 million kg. The estimated loss was projected after various surveys and study were conducted by tea associations based in Assam and Kerala. These surveys came after the MHA allowed tea gardens to function with 50% of the workforce, maintaining social distancing and hygiene. As the experts say, the best month for tea production is from March to May, however, with the COVID-19 outbreak at this very season, the tea industry is going to lose the highest in last 10 years.
North East Tea Association (NETA) and United Planters Association of Southern India (UPASI) independently concluded that due to various reasons arising from COVID-19, the tea industry across the country will lose three months of crops, declining the total annual production by nearly 10%. “The lockdown will affect tea production. The estimated loss will be around 150 million kg of tea,” said PK Bezboruah, chairman of Tea Board of India.
Shutdown After 197 Years
According to the study by NETA, Assam alone will lose ₹1,218 crores and a total crop loss of nearly 80 million kg in these three months. The study stated that the entire crop of March is lost, estimated to be nearly 30 million kg. “After an unproductive non-season for three months, the new tea season had barely started in the second week of March,” said the study. Even before the lockdown was announced, the tea garden closed down their operation on March 22.
Assam accounts for 52% of total tea production in the country and in the year 2019, the state produced around 720 million kg. “We have assessed the revenue loss as realistically as possible based on available official data of the Tea Board of India,” said the report. The revenue loss is calculated keeping last year’s average tea price into consideration, which was ₹152.16 per kg for north Indian produce.
Even though the tea gardens are to be operational after April 15, with 50% workforce, there are nearly no chances of production as the tea leaves have overgrown and there is a need of skiffing. Skiffing is a process of removal of overgrown tea leaves and the average recovery of skiffing takes around 25-30 days. “Considering the plucking operation to resume from April 15 and full recovery from skiffing, it is estimated that there will be a loss of 30 million kg crops in April and 20 million kg crops in May,” stated the study.
According to data available, there are around 8 lakh workers in tea gardens and tea processing operations across Assam. It is also reported that laying-off employees took place for the first time in 197-years of the existence of the tea industry in Assam. “In the time of war, economic crisis and during several civil disruptions, tea gardens never had a single lay-off or the operations were shut down for even a day. This happened for the first time. Workers are worried as there is non-payment of salary in some gardens,” said a Biswanath-based tea garden owner. “The loss projected is really big and this might end up in workers losing their jobs if the government does not intervene,” he added.
Export Affected; South India Incurs Heavy Loss
However, in south India, according to a study conducted by UPASI, the region is estimated to have a loss of ₹482 crores, including loss incurred from non-production, unsold tea, and a halt on export activities. Tea gardens across the region are going to lose around 23 million kg amidst the lockdown.
Moreover, this industry which mostly relies on export to countries like the UK, Japan and Iran are going have a loss of around 68% export this year. “The export is completely affected as every country claimed on their import. If this continues in May, the south Indian tea industry will see a loss as the export will be worse,” stated the report. According to an expert, the major importer of south Indian tea in Iran and due to sanction on Iran and the ongoing crude oil crisis, the Iranian economy has hit thus affecting the Indian tea export economy.
However, amidst the first phase of nation-wide lockdown, the Tamil Nadu government allowed operations in Nilgiri-based tea gardens on a very small scale.
No Premium Darjeeling Tea To Europe
Known to be the ‘tea-pot of India’, tea industry in West Bengal’s Darjeeling and Dooars regions have been highly affected as the region is known to be producing premium tea which is exported and are sold at a very high price. The export of the first-flush tea will not be possible as there are lockdowns across Europe, considered to be the largest market of first-flush tea.
According to the Darjeeling Tea Association, 35-40% of revenue comes from first-flush premium teas which are sold at a price ranging from ₹2,000 to ₹4,000 per kg. “The region has already lost the first-flush production. With this lockdown, the second-flush will also get affected,” said the association.
The region is estimated to have lost 2 million kg of first-flush tea, with a loss of ₹150 crores. However, tea gardens in West Bengal have resumed their operation with 25% workforce. There are around 3 lakh workers in 300-odd tea gardens in the region.
According to the Tea Board of India, the commerce ministry is working on a financial package for the tea industry. “The commerce ministry is working on a financial package for the battered tea industry which has been hit by the lockdown,” PTI reported.