Amid flickering hopes of a resolution to the impasse in Darjeeling, tea exporters and packeteers are scrambling to mop up whatever teas are being offered at the tea auctions here and prices have breached the ₹1,000 per kg mark for three consecutive weekly sales.
The industry has been apprehensive that even if the more than 60-day long deadlock was broken and estates were to open by September, production will not commence before October, when the onset of winter will limit output. About 75% of the year’s crop is as good as lost, they said.
Auction prices of this prime brew had averaged at about ₹300 per kg between 2012 and 2016, according to official statistics. Officials at the Calcutta Tea Trading Association said that in the three rounds of auction held this month, prices had moved in the range of ₹1,068 to ₹1,200 per kg which is double the prices at the Darjeeling tea auctions a year earlier.
Offerings, however, were low dropping from 17,000 kg in end-July to 8,700 kg in the sale conducted this week according to J. Kalyan Sundaram, Secretary General CTTA. He said that 8,400 kg were sold at an average price of ₹1,164.5 per kg.
Awareness measures
This was mainly picked up by two to three exporters. According to statistics given by the Indian Tea Association, in 2016, India exported 6 million kg out of a production of 8 million kg.
Buying by companies such as Hindustan Unilever Ltd. or Tata Global Beverages, which have major presence in the packet tea, has now tapered off in tandem with the declining offerings. “They buy in bulk and small offerings do not serve their purpose,” an official said.
Hindustan Unilever, which owns the heritage brand Lipton, has unveiled a campaign cautioning buyers against adulteration, saying that its Darjeeling tea packets guaranteed 100% Darjeeling teas sourced from certified gardens.
Ajay Misra, MD, TGB, told The Hindu that since TGB did not have an exclusive Darjeeling brand, it was not facing any major difficulty due to the choking off of Darjeeling tea leaf supplies.
Producer-exporter Goodricke Group Ltd. has also devised ways to protect its Darjeeling tea brands. The group has five gardens in Darjeeling with an annual output of about 0.5 million kg. “We are bracing for a 65% crop loss,” said MD and CEO Arun Narain Singh. He said that all promotional schemes have now been withdrawn so as to protect the brand and conserve tea stocks. “As a producer, we have our own source of teas which we are now using in the blends, to protect our brands.”
Demanding statehood, the Gorkha Janmukti Morcha has enforced a shutdown in Darjeeling since June 2015. Of late, some signs of talks with the state government and GJM and other parties are evident, although GJM has persisted with its statehood demand.
The Darjeeling Tea Association has estimated revenue loss of ₹400 crore to the industry. It also said that the loss of the second flush teas (season from May to July ) producing the unique muscatel flavour will have a cascading effect on an industry which is tottering under the impact of climate change, ageing bushes and high production cost.
