High output of CTC, orthodox teas to narrow export loss

Even as the Darjeeling unrest affected the second flush this year, the higher volume of CTC and rise in production of other orthodox tea varieties are likely to narrow the total export loss to only 4-6 per cent in 2017-18, said a senior official of tea exporter MK Jokai.
"The 104-day strike resulted in complete shutdown of plantations in Darjeeling, affecting the plucking of the second flush, considered the most premium in the country. However, the loss of 80 per cent of the second flush was about 6 million kgs or Rs 350-400 crore of premium orthodox tea," MK Jokai Vice President Parimal Shah told PTI here.

Therefore, the total loss in India's tea exports would be around Rs 250-300 crore, mainly compensated by higher volume of CTC and Assam orthodox teas, he said.
In FY17, India exported Rs 4,750 crore worth of tea, including CTC and orthodox, from Darjeeling and Assam, he said.
However, these teas are significantly lower in value than the Darjeeling orthodox, he added.
"Therefore, even as the exports of Indian tea (in terms of volume) may be higher compared to last year, in terms of value it seems that by the end of the year, total shipments may be behind by up to 4-6 per cent compared to last year," Shah added.

Shah said the Indian tea has in fact gained additional market share in the global market because, despite an 80 per cent loss in Darjeeling teas, which are a traditional export, the country still achieved higher shipments in terms of quantity and going forward it will lead to a much improved scenario.

Further, he said, the Darjeeling issue had definitely affected the international tea markets, especially for those who use significant components of Darjeeling as part of their blends or offerings.
"These markets are mainly the countries within the European Union, the UK and some parts of the US. The Darjeeling taste cannot be substituted easily by opting for a tea from another origin.

"Hence, there has been a vacuum in the Darjeeling tea market abroad as there has been no supply on account of the record 104-day bandh (as part of the Gorkhaland agitation)," he added.
This has led to the consumer opting for other origin teas such as a premium Ceylon, Assam or Sikkim, he said.
"This has boosted (to an extent) the demand for the Orthodox teas, especially in places where blenders have allowed themselves to replace their Darjeeling offerings with the above multi origin components," he added.
Thus, the demand for premium, good quality Orthodox has definitely gone up compared to last year.

"We are seeing an increase of between 15-30 per cent in prices for the premium quality Indian orthodox teas. As for the average orthodox teas, we are seeing an increase of 6-12 per cent," he added.
MK Jokai both manufactures and exports tea to markets like the US, Japan, European Union and Russia, among others.