» Business » As gardens stay shut tea firms suffer heavy losses

As gardens stay shut tea firms suffer heavy losses

By Avishek Rakshit
January 31, 2019 19:51 IST
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The quality of Indian tea had lately come under scrutiny in major export markets, due to the presence of pesticides and chemicals beyond permissible limits.

The Tea Board’s earlier decision to implement mandatory closure and opening dates for gardens across states has at least six producer companies complaining of high losses.

Last year, the Board mandated that all tea gardens in Bengal be closed from December 15, 2018, till February 10, 2019. The closure and opening dates for Assam gardens are December 10 and February 18, respectively.


The idea was that  an estimated 30-40 million kg (mkg) of inferior quality tea would go out of the market, improving prices at auctions.

The quality of Indian tea had lately come under scrutiny in major export markets, due to the presence of pesticides and chemicals beyond permissible limits.

Six companies from West Bengal and Assam appealed to the Board to allow plucking of leaves before the official date.

“Out of 300 hectares, we had pruned 10 per cent of the garden area in August to make some speciality green and premium CTC (crush, tear, curl) tea.

"We had started plucking these leaves during November-December, which ideally should have continued during January-February but we  had to stop operations,” said Sajjan Bagaria, executive chairman at Mainak Hill Tea Estate.

Together with T&I Global, Jay Shree Tea, MK Shah Exports, Nuxalbari Tea Company, Oodlabari Tea Estate and Darjeeling Impex’ Namring tea estate had applied for commencement of plucking before the mandated date.

D P Maheshwari, managing director at Jay Shree Tea, says their likely poss from the Board's order is Rs 10 crore.

Darjeeling Impex Namring estimates it lost an opportunity for 100 kg of speciality teas valued at over $200 a kilo.

“The decision to close the gardens and resume at a mandated day was taken so that prices improve. We have only seen prices improving for lower grades, while stagnant for upper grade tea,” Maheshwari complains.

Himanshu Shah, chairman at MK Shah Exports, which recently acquired some prized gardens from McLeod Russel in Assam, claimed their practices, including early pruning, allows them to harvest earlier than other estates.

“If we are not able to harvest the bushes before the Tea Board’s mandated date, we might lose revenue of Rs 3 crore.

"Board inspectors have already visited our gardens and I am waiting for what the Board finally decides,” he said.

In some estates, despite the gardens being officially closed, production continues.

During January-February 2018, despite all estates in Bengal and Assam officially being closed, production from Assam stood at 1.96 mkg and 4.99 mkg in Bengal.

Although A K Roy, the Board chairman, doubts the quality of leaves produced at this time of the year, he says: “We will inspect leaf quality whenever individual gardens approach us. If their leaf is found fit to be harvested, we will then decide on their plea of relaxing the mandate on those specific gardens.”

He says the leaves in North India (for tea, the entire country barring the south) during this season are "sub-standard" and the tea which can be made from these "not fit for human consumption".

“These leaves are bound to fail the quality parameters. It is in the best interest of the industry if plucking doesn’t resume before the mandated dates,” he says.

While Board officials are keeping vigil on processing factories, it has allowed plucking of fine buds for making speciality white tea.

Such tea is sun-dried and doesn’t need machinery or factories to be made.

Mostly sold via private deals, this tea fetches exorbitant prices. At best, 0.5-1.5 mkg of such tea can be produced in a year.

Photograph: Ahmad Masood/Reuters

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Avishek Rakshit in Kolkata
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