The Indian Tea Association (ITA) today said climate change and pest are the two biggest issues which continues to affect the industry.

"There is enough evidence that all the tea plantation areas are manifesting features that are indicative of prolonged periods of drought, excessive and or poorly distributed rainfall and extreme temperatures and generally poor tea growing conditions which have made the planters task very difficult," ITA Chairman C S Bedi said at its annual general meeting.

He said along with climate change, the ravages of incessant pest attacks take heavy toll on the crop.

While tea prices have registered some improvement in 2011 as also revealed by the trends in 2012, production, however, has been adversely affected both in north and south India, Bedi said.

The tea industry is also plagued with shortage of workers with the operation of MGNREGA in the neighbourhood, it has a major impact on worker turnout, with estate labourers opting for easy cash gratification, he said.

Meanwhile, exports to Iran have been severely impacted due to the disruption in the payment settlement mechanism.

"The Iranian Tea Association has shown interest in signing an MoU with the Indian Tea Association to open a revolving LC (Letter of Credit) which will safeguard the money of exporters," Tea Board Chairman M G V K Bhanu said.