More than two years after facing poor prices owing to quality slippage and loss of key export markets, Darjeeling tea is poised for a rebound this year.
In 2017, following the Gorkhaland agitation for separate statehood, the Darjeeling tea industry was totally shut for the entire prime season and the pruning cycles were destabilised. Pruning is essential to maintain quality of this tea variant. It is because of this quality that Darjeeling tea, commonly referred to as the “Champagne of Teas”, commands exorbitant prices globally.
"As the pruning cycle was thrown out of gear, so was the quality and the production as well. This led to a loss of quality which has been affecting prices very badly and they is down by almost 20-25 per cent now. This year, however, we expect prices to rebound," Kaushik Basu, secretary general at Darjeeling Tea Association (DTA) said.
Usually a third of the total bushes in an estate are pruned every year. However, in 2017, after the bandh was called off in winter, some of the estates had opted for full pruning, while others did a 50 per cent clipping of the tea bushes. Some others couldn’t even crop a third of their bushes. This upset not only the crop cycle, but also the overall quality and created a serious imbalance in trade.
On top of it, there has been acute labour shortage in the region since the agitation.
“Many workers had migrated to other states or have taken up other jobs owing to which there has been a shortage. It has been affecting some estates”, Atul Asthana, managing director at the Goodricke Group said.
Owing to the crisis, some of the larger companies converted their gardens into organic ones which are not as labour intensive as the inorganic ones. In effect, 70 per cent of the 87 estates in Darjeeling are now organic.
Basu said that the upset in the normal crop cycle in 2017 had a prolonged effect which is expected to return to normalcy in 2020.
“As quality improves, prices will also be good”, he said.
Although official data from the Tea Board of India is yet to be made available, DTA expects that the total production last year would hover around 8 million kg (mkg), which the industry recorded in 2018.
However, prices have been down by 20-25 per cent and export of Darjeeling tea has fallen by 10-12 per cent.
Sector officials further said that fund availability had also been a problem which had worsened the situation with Darjeeling tea. On one hand, all of the tea estates in the region lost a full-year’s revenue in 2017, interest costs and other production costs escalated in 2018. Moreover, last year, the prices had also been muted.
As compared to the usual price range of Rs 320-360 a kilo, Darjeeling tea, in 2019 had been sold at Rs 240-290 a kilo.
According to DTA, subsidiaries worth Rs 50-60 crore is still pending from the Tea board for the sector.
“We haven’t got any help either from the Centre, or the state government or the Tea Board and have been recovering on our own," Basu emphasised.
Additionally, unchecked import of Himalayan tea from Nepal, a lookalike of Darjeeling tea, has also been playing spoilsport, bringing down prices.
The first lot of Darjeeling tea is expected to hit the market in mid-March.