Tea Board of India is planning to set a floor price for the sale of tea at auctions.

It is also planning to take about 100 million kg of tea away from India’s output basket in a bid to prop up the flagging fortunes of the estate-based tea industry.

“Our target is to suck around 100 million kg of teas from the system within two years,” Tea Board Deputy Chairman Arun Kumar Roy told The Hindu.

This is proposed to be done through a slew of measures, including an early closure of tea plucking (started in 2018), allowing export of tea waste and insisting on increasing the fine-count level in teas (which enhances quality but takes away teas from a lot).

On the move on minimum auction price, he said that talks had already begun with various tea trading associations and indications were that it may be about ₹100 per kg for north Indian teas and ₹60 for south Indian teas. Around 50% of India’s total output of 1,350 million kgs is sold through auction.

Earlier, addressing the media,a press meet , he said that the industry was going through a tough phase with increased production (mostly through small tea growers’ segment) and stagnating prices. “There are liquidity problems in the industry on account of past loans and increased cost structure,” Mr. Roy said.

He also highlighted the new features of the new auction platform being set up by mjunction , saying that the aim was to improve price discovery through the introduction of an optional software against the one being done on the NSE-IT software for the six existing auctions centres. The proposed e- market place also aims to bring on board secondary and tertiary buyers by giving them access to the freshest tea, easy-to-use automated e-catalogue and faster movement of produce.

While organic tea producers and those from the tea clusters of Jorhat in Assam would benefit the most from this new platform, but others could also participate.

Iran exports

Mr. Roy said that he expected Indian exports to Iran to touch 30 million kg this fiscal, against 27.1 million kg a year ago. “As of now, we see no problem,” he said (due to the ongoing sabre rattling between the U.S. and the Iran government). Iran is India’s highly-prized export market, buying expensive orthodox teas. Importing 27.1 million kg in 2018-19, it accounted for 30% of the tea export earnings at ₹2,240.9 crore.

Unit value realisation at ₹269.6 was among the highest against an average of ₹223.2.

Targeting 250 million kgs of exports this fiscal, Tea Board has taken measures to aid exporters like encouraging orthodox and speciality teas that which has have huge export demand. The move to allow export of tea waste is also in this direction. “We expect this to increase exports as this is blended for use in ready-to-drink tea mixes,” Mr. Roy said. Exports have already increased between April and May 2020 to 36.7 million kgs from 33.5 million kgs a year ago.