India launches 'fight back' to boost tea market share
Monday, 3 September 2007
GUWAHATI, Sept 2 (AFP): India's hard-hit tea industry has launched an aggressive "fight back" strategy to boost production and sales in the face of stiff challenges from rival nations churning out cheaper brews.
India is the world's second largest tea producer and rangup a record 955 million kilogram (2,105 pound) crop last year with northeastern Assam state accounting for 55 per cent.
China, the largest producer of the brew, made 1.02 billion kilos in 2006. But prices have been under pressure since the 1990s.
"The new tea strategy now is to chase both volume and value in exports. We're getting positive results and 2007 is turning out to be a good year for tea," India's junior commerce minister Jairam Ramesh told AFP.
As part of its campaign to boost production and quality, New Delhi launched in June a 48-billion-rupee (1.2-billion-dollar) package to help the beleaguered industry replant aging tea bushes.
"The Special Purpose Tea Fund is a project covering about 200,000 hectares (494,210 acres) in 1,000 of India's nearly 1,600 plantations," Ramesh said. India's production is expected to jump by close to 40 per cent once aging bushes over 50 years old are replanted or rejuvenated-a process involving cutting or pruning, officials said.
"We will also plant high-yielding clones which would nearly double production and give us premium tea," Dhiraj Kakaty, an official of the Indian Tea Association, the top tea administration body, said.
India's 1.5-billion-dollar-a-year tea industry has been facing a crisis with prices dropping in weekly auctions since 1998 and exports plummeting.
The industry now is showing signs of resurgence, officials said in Assam, which has over 800 plantations that employ around one million people.
A kilogram of good quality tea fetched 73 rupees in recent weekly auctions compared to an average 68 rupees last year. And exports rose by eight million kilograms to 200 million kilograms in 2006 from the previous year.
Prices, however, are still below those fetched in the late 1990s when a kilogram of good quality tea from Assam or South India got 95 to 100 rupees.
The slump in prices and exports is largely attributed to cheap, inferior quality teas produced by many new growers like Vietnam, Bangladesh, and Iran. This has meant Indian teas are facing stiffer competition in the global market.
"(But) the overall mood is vibrant with the Indian tea industry now beginning to look up," the tea association's Kakaty said.
Spurred by recent successes in boosting foreign buyer interest, India's commerce ministry is organising a three-day International Tea Festival in Guwahati, the main city of Assam, in November.
The festival, dubbed the "Great Indian Tea Party," is expected to draw foreign buyers with 400 delegates set to arrive from around the world, including from Britain, Pakistan, Iran and Egypt.
Apart from meetings to showcase different kinds of Indian teas, the festival will also offer delegates a treat-a tea made by Assam's Singpho tribals.
India is the world's second largest tea producer and rangup a record 955 million kilogram (2,105 pound) crop last year with northeastern Assam state accounting for 55 per cent.
China, the largest producer of the brew, made 1.02 billion kilos in 2006. But prices have been under pressure since the 1990s.
"The new tea strategy now is to chase both volume and value in exports. We're getting positive results and 2007 is turning out to be a good year for tea," India's junior commerce minister Jairam Ramesh told AFP.
As part of its campaign to boost production and quality, New Delhi launched in June a 48-billion-rupee (1.2-billion-dollar) package to help the beleaguered industry replant aging tea bushes.
"The Special Purpose Tea Fund is a project covering about 200,000 hectares (494,210 acres) in 1,000 of India's nearly 1,600 plantations," Ramesh said. India's production is expected to jump by close to 40 per cent once aging bushes over 50 years old are replanted or rejuvenated-a process involving cutting or pruning, officials said.
"We will also plant high-yielding clones which would nearly double production and give us premium tea," Dhiraj Kakaty, an official of the Indian Tea Association, the top tea administration body, said.
India's 1.5-billion-dollar-a-year tea industry has been facing a crisis with prices dropping in weekly auctions since 1998 and exports plummeting.
The industry now is showing signs of resurgence, officials said in Assam, which has over 800 plantations that employ around one million people.
A kilogram of good quality tea fetched 73 rupees in recent weekly auctions compared to an average 68 rupees last year. And exports rose by eight million kilograms to 200 million kilograms in 2006 from the previous year.
Prices, however, are still below those fetched in the late 1990s when a kilogram of good quality tea from Assam or South India got 95 to 100 rupees.
The slump in prices and exports is largely attributed to cheap, inferior quality teas produced by many new growers like Vietnam, Bangladesh, and Iran. This has meant Indian teas are facing stiffer competition in the global market.
"(But) the overall mood is vibrant with the Indian tea industry now beginning to look up," the tea association's Kakaty said.
Spurred by recent successes in boosting foreign buyer interest, India's commerce ministry is organising a three-day International Tea Festival in Guwahati, the main city of Assam, in November.
The festival, dubbed the "Great Indian Tea Party," is expected to draw foreign buyers with 400 delegates set to arrive from around the world, including from Britain, Pakistan, Iran and Egypt.
Apart from meetings to showcase different kinds of Indian teas, the festival will also offer delegates a treat-a tea made by Assam's Singpho tribals.