Context

The Nilgiris tea industry is recently facing a persistent cost price crisis, affecting small tea growers in the region. Despite a healthy harvest, farmers are struggling due to plummeting prices of green tea leaves.

Challenges Facing Nilgiri Tea:

• Low GTL Prices: Often fall below production cost.
• Overcapacity: Too many factories competing for limited, seasonal output.
• Auction Issues: Poor price discovery, manipulation, and advance contracts.
• Export Reliance: dependence on Russia/USSR; limited diversification.
• Quality Concerns: Adulteration and inconsistency hurt brand value.
• Rising Costs: Labour and input costs strain small-scale growers.

Solutions:

·         Innovation in cultivation and processing techniques

·         Diversification of markets and product offerings

·         Strengthening institutional support, including policy reforms and subsidies

These actions are essential for:

·         Overcoming the persistent cost-price crisis

·         Ensuring the long-term sustainability and growth of the Nilgiris tea industry

·         Reviving Nilgiris tea’s reputation as a premium global product

About Nilgiri Tea:

Nilgiris tea, grown mainly in the Nilgiris district of Tamil Nadu, is renowned for its brisk, fragrant, and full-bodied liquor. It includes both orthodox and CTC (crush-tear-curl) varieties and is prized worldwide for its unique flavor, especially suited for iced tea blends.

·        The region benefits from ideal geographic conditions: high altitudes (1,000-2,500 meters), two monsoon seasons, and well-drained lateritic soil.

·        The tea industry here supports over 46,000 small growers over 34,000 hectares. Nilgiri tea earned Geographical Indication (GI) status in 2008.

About India’s Tea Industry:

India is the world’s second-largest tea producer, known for high-quality tea backed by strong geographical indications, advanced processing, innovation, and strategic marketing. In 2022, tea cultivation covered 6.19 lakh hectares across the country. India is also a top tea consumer, with around 80% of production consumed domestically. Production stood at 1,382 million kg in FY24.

Major Tea Regions:

• Assam: Assam Valley and Cachar regions
• West Bengal: Darjeeling, Dooars, Terai
• South India: Tamil Nadu, Kerala, Karnataka (accounts for about 17% of national production)

Export Trends

• India ranks among the top 5 global tea exporters, contributing about 10% of total global exports. Black tea dominates exports (96%), followed by regular and green teas.
• India exports tea to over 25 countries, with top buyers including UAE, USA, Iraq, UK, and Russia, collectively accounting for over 50% of exports.

Government Support:

The Tea Board of India (est. 1953) regulates and promotes the industry. It runs schemes like:

• Promotion for Packaged Tea of Indian Origin: Supports marketing and trade fairs.
• Tea Development and Promotion Scheme (2021-26): Focuses on productivity, quality, small farmers, worker welfare, R&D, and market promotion.

 Conclusion:

Nilgiri tea, once a prized global export, now faces structural and economic threats. Revamping auction systems, improving quality control, and enhancing market access are essential to sustain its legacy and the livelihoods it supports.