Tea industry hit hard by abnormal surge in natural gas price: North East Tea Association

The tea industry has been hit hard by the "abnormal" rise in the price of natural gas used as fuel in tea processing, North East Tea Association (NETA), a tea business organisation said on Sunday.

NETA Chairman, Kamal Jalan in a statement said that price of natural gas has gone up from Ra. 5,085 per 1000 scum to Rs. 21,119 per 1000 scum in the past 10 months, between July 2021 to April 2022.

"The per scum price of the natural gas has gone up by four times during the last ten months. The abnormal surge in natural gas price has become detrimental for the tea industry," Jalan said.

The NETA further said that the exorbitant hike in the price of natural gas has led to an increase in the cost of production (CoP) of made tea by at least Rs.6 per kg. "With such increase in costs, if the prices of tea at the farm gate level does not increase, then survival will be at stake," he said.

"It is our earnest appeal to the government to take a serious note on this issue with immediate steps to curb the price of natural gas," he further said.

Natural gas is used as fuel in the withering and drying of tea leaves during processing.

With over 800 big tea gardens, Assam adds over 50% of the country's annual tea production. But the industry, which employs over 10 lakh people have been facing a serious crisis since 2014 due to the rising cost of production, a spike in production and stagnant auction price. Covid situation further deepened the crisis in the tea industry and the rise in natural gas has come as another blow.

The NETA also appealed to the Centre to bring natural gas under the ambit of GST for the long term sustainability of the tea industry.