August 12, 2020
Coimbatore : United Planters Association of Southern India (UPASI) has strongly objected any move to tinker with the import duty structure which will be counter-productive for the tea growing sector.
Referring to reports in a section of the press that the tea Traders/Packeteers in the country have sought duty free imports of tea, in the context of marginal increase in tea prices due to lower production, UPASI President. A R Nagappan said that the industry employs 2.12 lakh growers and 11.65 lakh workers, of which more than 70 per cent are women and hence very important from the inclusive growth model pursued by the Government of India.
In a statement, he said that Indian tea production till June was lower mainly due to the initial lock down measures introduced to control the spread of Covid-19 Pandemic, which has led to some increase in the prices since mid June 2020, which was very much needed for the sustenance of this agro industry.
The decline in the production till June 2020, was just 8.9 per cent of the total tea production in the country, needless to mention this could be easily recouped in the second half of the calendar.
India being a surplus tea producing nation, exports around 18-20 per cent of its production. However, due to the pandemic, exports from
India is down by 26.98 Million Kgs in 2020 [Jan-May] and this quantity is available in the domestic market, Nagappan said.
The price increase witnessed in the last few sales does not substantiate the duty reduction argument, as the for the period January to June in South India was lower by 9.4 per cent, he said.
That being the fact, the demand for duty reduction appears to be a ploy to jolt the present market sentiments and from the consumer perspective, the increase in price per cup will be very marginal and will not impact in any way, as only 2 grams is required to make a good cup of tea.
Tea continues to be the cheapest beverage in the world. It may be noted that any fall in tea prices is usually fully absorbed by the producing segment, he said.
The producing sector for the past many years now has been witnessing either stagnant or declining prices on the one side and the increasing cost of production due to high input cost and high wage cost on the other.
Any changes in the duty structure will have a telling effect on this sector which caters to a large segment of population residing in the remote areas and If one were to compare tea prices vis-a-vis other agricultural crops, it is quite evident hat tea prices reported one among the lowest increase in the last two decades, Nagappan pointed out.
UPASI requested the Government that there should be no tweaking with the import duty of tea, currently at 100 per cent. Any such move to reduce the import duty will be detrimental to the interest of growers and workers dependent on this agro industry. Importantly, it is a question of livelihoods of tea grower’s and the workers.