Desai states: "Last month, we announced an increase of INR12 per kg for various categories of tea, and are forced to announce another hike of INR12 per kg now."
He stated that the prices of tea leaves are on a rise, due to which companies are being forced to hike the prices of processed tea. Desai stated that the prices of premium tea has gone up from INR292 per kg to INR316 per kg.
Piyush Desai, Chairman and Managing Director of Gujarat Tea Processors & Packers states: "Tea consumption is increasing at the rate of five percent, whereas production by two percent. Tea garden owners are leveraging the demand-supply gap, and for end users, tea is becoming dearer."
The consumption of tea in India is about 800 million kg per annum, while the output of the same in 2011 was nearly 980 million kg. About 180 million kg of tea was exported in 2011.
Piyush stated that the demand-supply gap for tea in the country was on the rise because of declining tea production. He added that tea output in India has been recorded at 82.29 million kg in January-March 2012, indicating a fall of 13 percent as compared to the same period in 2011.
"Erratic rainfall and changing weather conditions might bring a further dip. The only way to ease the burden on consumers is to lower import duties, as the tea is available in Kenya and other African countries at cheaper rates," stated Piyush.
Packaged tea merchants from India have put forth a request to the Union Commerce Ministry to lower the import duty.
Source: DNA India