Tea companies may lose Rs 2000 cr this year due to coronavirus outbreak

Tea plantation companies across the country could be heading for a consolidated loss of around Rs 2,000 crore this calendar year, as all areas have been closed to contain the spread of the deadly coronavirus.

While the estates were initially kept open, with plantation companies arguing that the risk of infection was extremely low in the estates, the call was taken after the government and various governments announced the 21-day closure of states adopting foreclosure orders.

All the 1,422 registered tea plantations and more than 250,000 micro-small planters stopped production on the grounds of safety precautions for workers, unavailability of transport to transport the finished tea and virtually no demand whatsoever at the level national or importing countries.

“For the moment, it is of the utmost importance to stop the spread of the coronavirus and the domains are thus closed”, Arun Kumar Ray, vice-president of the Tea Board.

Rough estimates from plantation companies have established a production loss of more than 100 million kg (mkg) across India, which is estimated at around Rs 2000 crore. Usually, plantation companies in Assam and West Bengal produce about 15% of the total tea in March-April.

Usually called the teapot of India, Assam produces around 50% of the country’s total tea each year, which represented around 1390 million kg in 2019.

The closure also affected the first main flush in the Darjeeling and Dooars region, where teas from this period of the year are sold at a high price, as there are no buyers.

“Even after the domains have opened, it will take another 10 days for the skiff to clear the overgrown leaves,” said Atul Asthana, general manager of the Goodricke group.

Plantation companies believe that if the fields were closed until mid-April, production would not start until May. The second hunting season, which produces the best quality teas at an extraordinarily high price, starts from May.

“However, a lot of preparation is required to produce the best teas from the second flush. If operations start from May, it may be too late to produce the most expensive teas, “said a Darjeeling planter, who generally exports luxury teas to Germany and Japan.

Earlier, citing the secluded nature of tea plantations, companies had chosen to keep the gardens operational until state governments ordered the closure.

Exporters, on the other hand, reported that there was virtually no demand from the major importing countries, as most of them, including Iran, Japan, Germany, United Kingdom, the United States and others, are currently busy fighting the spread of the contagion. In fact, this led to the cancellation of the Mombasa auction and buyers cannot travel.

“Almost no futures contract has been signed and only willing buyers are showing interest. However, the demand is extremely low, ”said an exporting company from Kolkata.

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