tea property wage hike: Wage hike of tea property staff to extend the price of manufacturing by Rs 16/ kg

Nonetheless, the impression could be decrease for producers of high quality tea, given the worth premium they get pleasure from over the common market realisations.

ICRA in its newest report on bulk tea, has highlighted that the whole wage charge per man day (together with bonus, different money elements and advantages) for tea property staff in West Bengal is estimated to extend by 12% w.ith impact from. January 1, 2022, given the current announcement made by the Labour Division, West Bengal, of enhance within the fundamental wages on an interim foundation by 15% to Rs. 232/day from Rs. 202/ day.

Wage charges in Assam and West Bengal have traditionally moved in tandem. Following the announcement of the interim wage hike, the present fundamental wage charge in West Bengal stands at Rs. 232/ day vis-à-vis Rs. 205 per day in Assam. The hole in fundamental wage charges signifies the probability of Assam revising charges shortly. Any revision in wage charges in Assam, the key producer of bulk tea (contributes ~60% of North India manufacturing and 50% of all-India manufacturing), would materially impression profitability of the whole North India bulk tea trade, except there’s a commensurate enhance in tea costs.

Commenting on the current announcement by the Labour Division of the Authorities of West Bengal, Mr. Kaushik Das, Vice President and Co-Group Head, Company Sector Scores, ICRA, stated: “This interim wage hike is more likely to lead to a margin contraction of round 700 foundation factors on a YoY foundation, for bulk tea gamers based mostly out of West Bengal, at a gentle state degree of realisations.

Nonetheless, the impression is more likely to be decrease for bulk tea gamers targeted on producing high quality teas, given the excessive premium their produce fetches over the market costs. An evaluation of the public sale costs throughout H1 CY2022 signifies that costs of North India CTC (crush, tear, curl) teas produced by the highest 50 estates, at Rs. 319/ kg, was 79% greater than the general public sale common. The premium has elevated this yr in comparison with 65% in CY2021.”