Why are nearly half of Darjeeling's tea estates looking out for buyers?

Indian tea market's priced possession, Darjeeling tea often called the "champagne of the teas", has been struggling over the years to maintain its place in the international markets.

Almost half of Darjeeling's tea estates, are up for sale according to a report by The Economic Times.

Liquidity challenges amid high wages, falling demand and prices are brewing trouble for the "champagne of the teas"

Missing Buyers: 

Europe, a top export destination for Darjeeling tea has been facing recessionary pressure and thus a fall in demand from European consumers has worsened the situation for tea producers. 

Also, Japan, one of the biggest customer of Darjeeling tea, drastically cut tea purchases from India after a 100 day shut-down in 2017 due to the Gorkhaland agitation. During this shut-down, Japan, a key international customer, turned to Nepal for tea. 

Missing international buyers, from Europe and Japan have affected the prices of tea. The rise of Nepal's tea in both, import and export markets, has hugely impacted the production of Darjeeling tea and sale over the years. 

Nepal Tea in domestic market: 

There were reports that tea of inferior quality from Nepal is being sold and re-exported as premium Darjeeling tea from India. Between January and May 2022, import of tea from Nepal stood at 4.59 million kg compared to 1.98 million kg in the same period in 2021.

This is further diluting the global brand image of India and also affecting domestic tea prices.

Also Read: Nepal brews a fresh crisis for Darjeeling tea with cheaper leaves
 

Falling production:

In its prime, Darjeeling tea production touched 11 million kg in a year. In 2021-22, its production was at 7.15 million kg.

Policy intervention:

• In 2003, the government had prohibited blending of any imported tea with Geographical Indicator (GI) tagged tea. 
• In November 2021, the tea board issued a notification to restrict distribution of inferior imported tea in domestic market. 
• The West Bengal government allowed the use of 15% of tea estate land for tea tourism. So local buyers are looking to convert these gardens into resorts for tea tourism.

India's premium tea, has been bearing the brunt for over a decade now. As 40-50% of estate owners are looking to sale their gardens, it remains to be seen how the Darjeeling tea and India's tea industry will tread through this.