BUSINESS

Stir ‘shuts’ Darjeeling tea trade

Hit hard:Even if the estates were to open in September, overgrown leaves will not help in production, says ITA.

Hit hard:Even if the estates were to open in September, overgrown leaves will not help in production, says ITA.  

Revival package sought as industry suffers Rs. 400-cr. loss due to Gorkhaland strike

Estimating a Rs. 400-crore loss to the Darjeeling tea industry due to prolonged closure, the Indian Tea Association (ITA) has sought a revival package for the industry, including moratorium on long-term loans and interest-subsidies.

In an appeal to the Union Minister of State for Commerce Nirmala Sitharaman, ITA said that the Darjeeling tea industry had already incurred an estimated crop loss of about 4.5 million kg due to the more than two-month-long strike called by the Gorkha Janmukti Morcha.

Export revenue

“The indefinite shutdown in tea estates in Darjeeling has coincided with the high-quality second flush period which generates substantial export revenue .. this has caused severe financial stress to the industry threatening its viability,” according to the letter. Wages had not been paid to the workers since the gardens’closure, it added.

“Even if the estates were to open in September, the weeds/overgrown green leaf will not be suitable for production and would have to be slashed. The normal gestation period prior to the next harvest would be minimum three weeks,” the association said in the letter. ITA felt that about 80% of the year’s crop would have been lost due to the disruption.

ITA secretary general Arijit Raha feared a loss in the export market for Darjeeling tea as importers/international blenders and packeteers may be compelled to replace Darjeeling tea with leaves sourced from other origins. “This happened in the past, in the 1980s, following a ban on export of CTC teas,” he said.

ITA has sought relief on repayment of loans by a two-year extension and 6% interest subsidy.

The industry’s loan exposure is about Rs. 500 crore and the interest subsidy is estimated at about Rs. 30 crore annually.

Additionally, ITA also sought expeditious settlement of pending subsidy claims for the development works, enhancement of the 3% export incentive rate, and waiver of fees on certificate of origin (payable to the Tea Board).

However , the Darjeeling Tea Association has not yet finalised its revival package, saying it would need further discussions with the Tea Board. The loss assessments were, however, close to the ITA estimates.

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