European Demand For Darjeeling Tea Sees a Steep Fall

The Darjeeling tea industry is dealing with a double whammy of low international demand and shortage of high quality crops.

New Delhi: The demand for Darjeeling tea in Europe has fallen by 10-15% around the same time as Germany, the largest importer of this tea, is reeling from a recession, the Financial Express reported

Indian Tea Exporters Association chairman Anshuman Kanoria told the Financial Express, “In Europe, the demand is at least 10-15% less compared to last year. Moreover, the unit sale price is the same or marginally lower. The exports to Europe will be low this year.”

Europe and Japan are the two large overseas markets for this premium tea, the first product to get a geographical identification (GI) tag in India, the report said. The exports to Japan are also low this year due to a weak yen, the Financial Express reported. 

Nearly half the annual produce of Darjeeling tea is usually exported. The total exports of Darjeeling tea stood at over 3 million kg last year, the report said. 

Failed crops

The tea industry is dealing with another problem: a shortage of high quality crops and a surplus of mediocre quality due to erratic weather this year, the report said.

By the middle of April, the first flush crop had been down by 30% due to hot and dry weather conditions. After that the hills received abundant rainfall resulting in a bumper crop during the end of April and first week of May. But this crop quality was low-medium, the Financial Express reported.

Darjeeling tea depends on rains for both quantity and quality of first flush, which is special and fetches the highest price in the market. The first flush, which marks the start of a new season in March and continues till April, contributes around 20-25% of the annual tea production in Darjeeling, the report said. 

“Now due to hot weather conditions, the second flush of tea has been delayed by at least two weeks,” Kanoria told the Financial Express. Second flush contributes around 20% of annual Darjeeling tea production.

Darjeeling tea industry has been witnessing a gradual fall in production over the last few years, the report said. In 2011, the tea production was 9.14 million kgs, while it was 8.13 million kgs in 2016, the Financial Express report said. 

The production has been affected by climate change, labour issues, lower productivity and profitability, according to industry insiders. 

Industry in decline 

Last year too, the prices of Darjeeling tea plummeted due to the Russia-Ukraine war that resulted in a weak demand from Europe, the Economic Times (ET) had reported.

Kanoria said the Darjeeling tea business has been suffering since the agitation in the hills in 2017. “There has been no effort from the government to promote Darjeeling tea in the world markets. The impact of the Russia-Ukraine war is being felt no doubt, but there should be an effort from the government to revive Darjeeling tea while the domestic market is flooded with Nepal teas,” he told ET.

Many planters have been forced to sell their gardens because of financial crises over the recent years, the Financial Express report said.