Govt mulls fixing minimum benchmark prices for different grades of tea

The commerce ministry's Tea Board is considering an industry demand for setting up minimum benchmark prices for different grades of tea leaves, an official said.

Indian Tea Association (ITA) has demanded that the government should set up minimum benchmark prices for different grades of tea leaves to promote growth of the sector and push exports.

"Tea Board and ITA is in discussions over the issue. The demand is reasonable," the official said.

According to the industry, implementation of the demand would help tea companies to deal with the cost-disparity problem, which is impacting the sector. The benchmark price is based on tea production and previous months auction rates.

According to the proposal of the industry, various grades of tea should not be sold below certain prices set by the board. India exported tea worth Rs 5,132.37 crore in 2018 as against Rs 4,987.59 crore in 2017.

The main export markets for India are Iran, China, UAE, Pakistan and CIS countries like Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Tea production saw a decline across the country during January this year at 13.96 million kg compared to 17.68 million kg in the corresponding period a year ago.

South India contributed to the entire produce of 13.96 million kg in January, comprising 7.81 million kg by big growers. The Tea Board is functioning as a statutory body of the central government under the Ministry of Commerce. It is constituted of 31 members (including Chairman) drawn from Members of Parliament, producers, traders, brokers, consumers, and representatives of governments from the principal tea producing states, and trade unions. It is reconstituted every three years.