Rising cost in tea industry

Rising cost in tea industry

Subject: Geography

Context :  A majority of the bulk tea producing companies which operate estates in North India (Assam and West Bengal), are likely to witness a contraction in margins during the current fiscal on the back of an increased cost of production due to wage hike and drop in prices.

Concept:

The tea industry in North India, which registered 12-13 per cent decline in production last year, had its costs rising by ₹35- 40 a kg. However, the average price of tea increased by ₹60- 65 a kg last year

Tea

• Tea is a beverage made from the Camellia sinesis plant. It is the world’s most consumed drink, after water.
• It is believed that tea originated in northeast India, north Myanmar and southwest China, but the exact place where the plant first grew is not known. There is evidence that tea was consumed in China 5,000 years ago.

Economy:

• Tea production and processing constitutes a main source of livelihoods and subsistence for millions in developing and least developed countries.
• It is a labour-intensive sector, providing jobs, especially in remote and economically disadvantaged areas.
• Tea can play a significant role in rural development, poverty reduction and food security in developing countries, being one of the most important cash crops.

Plantation condition:

• Tea is a tropical and sub-tropical plant and grows well in moderately hot and humid climates.
• The ideal temperature for its growth is 20°-30°C and temperatures above 35°C and below 10°C are harmful for the bush.
• It requires 150-300 cm annual rainfall which should be well distributed throughout the year.
• The most suitable soil for tea cultivation is slightly acidic soil (without calcium) with porous sub-soil which permits a free percolation of water.
• The major tea-producing states in India are: Assam, West Bengal, Tamil Nadu, Kerala, Tripura, Arunachal Pradesh, Himachal Pradesh, Karnataka, Sikkim, Nagaland, Uttarakhand, Manipur, Mizoram, Meghalaya, Bihar, Orissa.