MUNNAR // In Kerala's tea country, meandering mountain roads pass through rolling green valleys lined with thousands of neatly manicured tea bushes.
Distant groups of brightly dressed tea pickers look like mere specks bobbing in the sea of lush greenery, while tourists snap pictures or simply gaze in awe at the countryside around the hill station of Munnar.
But beyond the seemingly perfect, picturesque landscape of this southern Indian state's tea industry, troubles are brewing.
Tea estate managers and other industry sources in Kerala describe a sector struggling amid soaring labour costs and unfavourable weather patterns, while the rivalry from China and other tea growing nations looms large.
"Costs are spiralling," says JDurairaj, the assistant director of advisory services at the Upasi Tea Research Foundation's regional centre in Munnar.
"China, the way in which they are growing, is really threatening. Particularly in Kerala, the wages are very high compared to other planting districts across India. The tea price in the auction is not going up at the same level of the input cost or the labour cost."
Last month, six of the major tea producing countries - India, Sri Lanka, Indonesia, Rwanda, Malawi and Kenya- agreed to set up the International Tea Producers Forum, essentially a tea cartel, to try to control prices to some extent and promote the industry.
But with tea being perishable and varieties of tea varying dramatically, experts say that such a cartel has little chance of operating in a similar way to how the major oil-producing countries run Opec, despite widespread fears that the cost of a cup of tea will escalate.
"I'm not sure how far it's going to be successful," says Mr Durairaj, explaining that countries such as Indonesia produce cheaper teas than the subcontinent.
In the south of India, including Kerala, there are other forces at work that would be beyond the control of the tea cartel.
Adverse weather conditions, including frost and poor rainfall, last year contributed to a 17.3 per cent decline in exports from south India over the January to March period to 14.4 million kilogrammes and a 21.8 per cent drop in the value to 1.34 billion rupees (Dh90.6 million), according to official figures.
This prompted a 4.2 per cent decline in India's overall tea production in the first seven months of last year to 470.8 million kg compared with the same period a year earlier.
"The industry is in a pretty bad position," says Appu Abraham, the assistant manager of Harrisons Malayalam's 373-hectare Lockhart tea estate in Munnar, which is expected to produce 3,670 tonnes of raw green leaf tea in the current financial year. The estate produces its tea for export, with the Middle East, particularly the UAE, being its main market.
Wages of plantation workers have rocketed to about 310 rupees a day, including a minimum wage and all the benefits that the state government demands that employees are paid. The basic wage in south India's tea estates rose to 183.45 rupees last year compared with 77.84 rupees in 2002, according to figures from Upasi.
The Lockhart estate has managed its rising costs by cutting down on labour. Over the past decade it has almost halved its number of workers from about 840 in 2002 to 456 last year.
"Every year we'll reduce the workforce by about 5 to 6 per cent," Mr Abraham says. In regions in the north-east such as Assam, plantations could often command more than double the price for their tea and could pay their workers less than half the wages that would be paid in Kerala, he says.
The tea industry in Kerala is trying hard to modernise its operations by adding tea picking machines that would allow it to reduce its labour force and increase production.
In the past six months, the Lockhart estate has been trialling five harvesting machines, which are operated by two workers and cost 5,000 rupees. Using such machines, each worker can produce 400kg of tea a day compared with a maximum of 150kg a day by using manual shears.
The estate stopped using the traditional hand plucking method in 2000, with that only yielding about 40kg a day, although hand-picked tea is widely considered to be of a higher quality. The estate plans to add a further five to 10 machines in May.
"Day to day, we have a problem with the labour cost," says Mr Abraham. "Labour availability is also a major problem because in Kerala the children are getting educated and they don't want to work here - they get settled in the big cities. Half the people have migrated to other places."
Prices of pesticides and fertilisers have also increased dramatically, as the government has reduced subsidies, he adds.
Bob Devaiah, the group manager of Talayar Tea Company in Munnar, says the prices the company was getting in tea auctions were "not good", averaging at 102 rupees per kg over the last year.
"All over south India, it will be in trouble," he says. "The north will be able to survive because of lower wages."
Mr Devaiah says the estate has not turned a profit for four to five years and expects to lose between 2 million and 2.5 million rupees in this financial year, which ends on March 31.
The estate is using enforced leave for its employees to try to reduce costs. It is also hoping to diversify the use of the estate, for tourism, for example, to try to generate additional revenues, Mr Devaiah says.
Talayar has not started using machines yet, but intends to do so to increase productivity.
"It's a challenging time because of the climate changes particularly," says R Ambalavanan, the executive director in south India for the Tea Board of India. "Labour cost is very high. We are trying to mechanise our fields as much as possible, but even for that you need the skills to operate the machines.
The rising cost of living and better salaries in industries such as construction and retail meant that many Indians do not want to work in the tea industry, he says.
"The Tea Board is trying to address all these issues," says Mr Ambalavanan, explaining that it was trying to step up promotion, increase the quality and boost export capacity. "We are trying to have a better price realisation, but unfortunately the supply chain is very long in India, so the profits are not really going to the producers and the tea growers actually."