Spread The Aroma
‘Produce what others want’ is the new mantra for the Indian tea industry
30 Nov 2007
TEA CONNOISSEURS: About 450 delegates from across the world gathered at the convention (Courtesy: Eastern Projections)
Over high teas and sumptuous lunches, two questions dominated the discussions of tea captains from all over the world, who had come together for the Great Indian Tea Party at the Indian International Tea Convention (IITC) 2007 in Guwahati — “Where are the new markets?” and “What should be sold to them to get maximum returns on the product?”
The answer, according to Jairam Ramesh, minister for commerce, is simple enough — “produce what others want’’. Speaking on the first day of the convention — which brought together nearly 450 delegates from across the globe — he said that over the years, there has been a shift in preferences from CTC to Orthodox teas and India should also adapt to this change. “We have to do it to meet the challenge as otherwise we will lose out,” he said.
No wonder, then, that Mohammad Beyad, the Tehran-based director of Britannia Tea Company, London, was here to buy the best quality Assam tea. Iran is a huge market for Assam orthodox tea. It consumes around 110-120 million kg tea every year, 95 per cent of which is orthodox tea. The government plans to increase the production of orthodox tea from 80 million kg to 140 million kg in the next five years and has launched a Rs 100-crore subsidy scheme for the same.
The past should not be a model for the future, said Commerce and Industry Minister Kamal Nath at the valedictory session. “We have to create new markets and brand our products in tea,” he said. “We are all there to help the industry but it should guide us.” India is the world’s second-largest producer of tea and the fourth-largest exporter.
The focus of the IITC 2007 was to develop India’s response to the new global challenges and strengthen its image as a dependable tea supplier, said Aditya Khaitan, chairman of Consultative Committee of Plantation Associations.The Indian tea industry has a turnover of Rs 6,500 crore and supports an employment base of some 1.25 million. “The industry would be formulating a strategic road map in partnership with the Tea Board regarding the policy interventions required to help India compete in the new markets,” said Khaitan. “We look forward to a long-term government-industry partnership to carry out this critical task.”
Tea Plantation Business
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While it is difficult to gauge the success of the convention — which showcased India as a one-stop shop for a wide range of quality teas ranging from robust Assams to aromatic Darjeelings as well as other regional varieties — it did give a glimpse into the minds of importers. “This was a good one-stop forum for people in the tea trade to know what other countries wanted,” said Dhiraj Kakati, secretary of Assam Branch of Indian Tea Association (ABITA).
The convention gave foreign delegates a chance to see for themselves the way that Assam tea is grown and processed, said Kakati. Assam contributes 50 per cent of the country’s entire tea production. “A taster can distinguish between good and poor quality tea,” said C.S. Bedi, chairman of the Tea Research Association. “However, his perception of good quality invariably tilts towards Assam tea. Reference to good quality is an integrated sensation of many attributes such as colour, strength, flavour, briskness and a balance of these attributes is essential, which is present in Assam tea. If Darjeeling tea is the champagne of the tea world, then Assam tea is its best cognac.”
THE TRUE FLAVOUR: The convention showcased India as a one-stop shop for a wide range of quality teas (Courtesy: Eastern Projections)
Consumers in India seem to prefer teas that release a pleasant aroma during preparation, said P.T. Siganporia, the managing director of Tata Tea. Yet another reason for the popularity of Assam tea.
However, not everything is hunky-dory for Assam tea. In fact, Nick Revett, the commodities and technical services director of R. Twining, pointed out that Assam tea scores low in comparison with other classics and specialty blends. “A large percentage of Assam tea that is drunk in the UK is not necessarily driven consciously by primary consumer preference for their origin but by UK packers choosing to utilise tea in their major blends, albeit to fulfil their brand objectives,” he said. “The platform and identity with the consumer is relatively weak, thus, in order to fulfil the goal of increased exports to this market, the first step is to work closely with the UK packer who is inextricably linked to the UK consumer.”
The issue of pesticide limits was also raised. Europe has stringent laws about pesticide residue and the issue can only be dealt with effectively by the trade bodies of India and Europe together, said Franz Thiele of Thiele and Freese. “Indian and European tea trade have to work hand in hand,” he said.
Quality, too, was an issue with Kenya taking a lead on the matter. “Quality has been our buzzword and teas sent to Kenya should be of high quality,” said Dunston M. Ngumo, chairman of the Tea Board of Kenya. Assam’s industry minister, Pradyut Bordoloi, is also worried about quality. “We are concerned about the deterioration of quality of Assam tea and will soon impose quality stipulations on tea coming from bought leaf factories,” he said.
Mohsin Saify of Tapal Tea of Pakistan said the company wished to make Assam tea an integral component of its blends to add value but at a price point. “India and Pakistan have the ability to transform the region into a single tea market and the Indian government should develop and promote Indian tea in Pakistan as a brand.” Ramaz Chanturiya of Rosschai Russia said that in order to reposition Indian tea in the consumer’s mind and win back the market share in Russia, the Tea Board of India should promote Darjeeling, Assam and Nilgiri teas. “Darjeeling, Assam and Nilgiri are widely and universally acknowledged to be the finest teas, because the flavour of each is so unique that it cannot be replicated,” Chanturiya said.
Tea Plantation Business
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At the convention, there was a general feeling that the Indian tea industry is in for exciting times, for not only is the market showing signs of stabilising after 4-5 years, but an ambitious government-sponsored programme for uprooting and replanting is also underway. “No one will forgive the industry if we make compromises and put out low quality planting material,” said Bedi. “The onus is on us to make this a success.”
The tea industry also addressed the issue of social costs. Khaitan urged the central government to share a part of social security cost to inject a fresh dose of competitiveness into the plantation sector and in so doing, free it to concentrate its energies on what it should be doing best — producing quality tea at the most competitive cost and expanding and servicing markets with alertness and vigour.
(Businessworld Issue 04-10 Dec, 2007)