Siliguri, Aug. 12: Bought-leaf factories, which thrive on supply from small growers, today said they were finding it difficult to carry out their operations because of the tea strikes in north Bengal
Sanjoy Dhanothi, president of the North Bengal Tea Producers' Association (NBTPA) that represent the factories, said prices of the tea in auctions had drastically come down in the past few weeks, and now, it was even lower than the cost of production. "All BLFs (bought-leaf factories) are overloaded with stocks of made teas because of lack of demand from buyers. Added to this, is the continuous fall in auction prices over the past few weeks. Our tea is selling at Rs 65-80 per kilo. This has reduced our profitability as such low rates are not even covering our cost of production, leading to losses," Dhanothi said. "We have urged the state government and tea board to intervene and take initiative to ensure that we tide over this crisis."
The BLF owners, while elaborating on the deterrents in the growth of the sector, said they were facing acute shortage of tealeaves. "As new production units have been set up by tea estates and new licences are being provided to more BLFs, the supply of tealeaves is not steady even during the peak season. Each of our units is facing a daily shortage of around 35 per cent, compared to their optimum production capacity. This is increasing our per unit production cost as certain expenses are fixed and do not change with the scale of production," the NBTPA president said.
Asked about the allegation levelled by small growers that the BLFs were paying lesser prices to them, Dhanothi said it was only because of the strike in the tea gardens. "Once the strike is over and the small growers start supplying to the bigger gardens, we will again face the problem of shortage of raw material," he said.
Small growers or planters, who own less than 25 acres and have been hit because of the ongoing impasse and strike in the Dooars and Terai tea industry, however, stuck to their allegation that they were being paid less. "This year, a kilo of tea fetched us as high as Rs 12 but right now, it has dropped to Rs 5. We cannot sustain this loss as our average production cost is Rs 10.50 per kilo," Bijoygopal Chakraborty, associated with the United Forum of Small Tea Growers Associations, an apex body of small growers in the region, said. "Correspondences have been made with the tea board and the state government, and we have urged them to look into our problem of poor price realisation."
According to figures available in the industry, there are around 30,000 small growers and 95 BLFs in north Bengal. In 2010, the total tea produced in north Bengal was 240 million kg. Of this, 92 million kg had been produced from leaves provided by small growers.
The crisis, which is plaguing both the growers and the BLFs, has prompted the tea board to call a meeting here on August 17. "A meeting has been called to discuss certain issues with representatives of BLF owners and growers," said K.K Bhattacharya, the deputy director of the tea board posted in Siliguri. "Issues like price realisation and production would be discussed in detail."
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