Darjeeling tea prices fell by half in last week’s auction due to weak demand from Europe, which has raised concerns in the industry.
“The Russia-Ukraine war has created an atmosphere of uncertainty throughout Europe. Europeans are feeling the effects of rising inflation,” Vinod Mohan, a Darjeeling planter and former chairman of the Darjeeling Tea Association, told ET. “Even if they buy tea, they are not willing to pay more. The price is the same as last year, although the cost of production has gone up due to the increase in the price of coal, fertilizer and other raw materials.”
European buyers are paying Rs 10-20 per kg depending on the quality of tea from Darjeeling producers.
Europe is the main market for Darjeeling tea. Darjeeling’s 87 tea gardens produce first flush, second flush and rain tea. There are buyers of first flush and second flush teas in foreign markets, but rain tea finds very few foreign buyers.
Anshuman Kanoria, chairman of the Indian Tea Exporters Association, said the Darjeeling tea business has been suffering since the 2017 uprising in the hills. “There is no effort on the part of the government to promote Darjeeling in the world market. The effects of the Russia-Ukraine war are undoubtedly being felt, but there should be an effort on the part of the government to revive the Darjeeling wheel, which is considered ‘tea champagne’,” he said. “Nepal’s domestic market is flooded. Union Commerce Minister Piyush Goel has asked the Tea Board to come up with a package to promote tea in the world market. We are waiting for the package.”
Darjeeling tea production, one of the most popular tea varieties worldwide, has shrunk to 6.5 million kg in 2021, the lowest on record and only half of the 13 million kg produced two decades ago.