Darjeeling tea exporters going through rough patch

Darjeeling tea exporters are going through a rough patch, with foreign buyers refusing to compensate them for exchange rate losses.

About a year ago, the euro stood at 80-84 to a rupee; currently, the rate is 68/euro. Though the pricing of these teas is the same in euro terms, in rupee terms it means less income for sellers. For Darjeeling growers, the loss is significant, considering 90 per cent of the tea and the entire first flush is exported.

“Foreign buyers are willing to give only 10 per cent more than last year,” Goodricke Group Managing Director and chief executive, A N Singh, said recently.

In 2014, the value of tea exports from north India stood at Rs 2,777 crore. Darjeeling accounted for a significant part of that. Though it produces only about 10 million kg a year, these are high-value teas.

The sector is faced with other problems, too — higher costs on account of wages, etc. Effective April, daily wages will be increased to Rs 122.5. “Around 95 per cent of the first flush is produced in April,” said Chamong group Chairman Ashok Lohia.

Wages in Darjeeling are Rs 5 higher than in Terai and Dooars.

Low rainfall in pockets of Darjeeling is taking a toll on the profits of the sector. “The tea is meant to be delivered to European markets before the Easters. We have today and tomorrow to ship the tea, but not much has been produced,” Lohia said.

According to data from the Indian Tea Association, the rainfall in Cachar (Assam) is estimated to be 59 per cent lower than last year. According to estimates, production between January and mid-March declined by about 5.85 million kg compared to the corresponding period last year.