Tea Industry Struggles with Sluggish Consumption and High Inflation

The Indian tea industry is grappling with several challenges, including sluggish domestic consumption growth, rising food inflation, and a slow recovery in exports following the Covid-19 pandemic. During the 10th annual meeting of the Federation of All India Tea Traders Association (FAITTA) in Guwahati, chairman Sanjay Shah highlighted these issues. He noted concerns over the market's ability to absorb multiple rounds of price increases driven by rising raw material costs.

Despite these challenges, tea production in 2023 is expected to reach 1,393 million kg, up from 1,366 million kg in 2022. However, average tea prices have softened in 2023 due to export pressures, even though prices in 2022-23 averaged Rs 180 per kg. The shift from loose tea to packet tea and the rise in non-premium product consumption due to inflation have also been highlighted as significant factors impacting the market. Exports saw a decline in shipments during 2020 and 2021, but some recovery has been noted, with exports totaling 228 million kg by 2023.