The Ukraine war and a weak Japanese yen have hit overseas demand
Exports of the world famous Darjeeling tea will likely fall by about 10 per cent this year, compared with last year on the back of weak global demand.
“Because of the current global situation exports are likely to drop by around 10 per cent compared to last year. The Ukraine-Russia war and a weak yen in Japan are impacting exports,” the Indian Tea Exporters’ Association chairman Anshuman Kanoria told businessline.
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.
“We have lost markets in Russia and Iran. Iran is buying a limited amount of Darjeeling tea now,” Kanoria said.
Total exports of Darjeeling tea last year was over 3 million kg (mkg). In 2022, production of the popular tea variety was 6.93 mkg, down from 7.01 mkg in 2021, according to data provided by the Tea Board of India.
For the period January–August, 2023, the Darjeeling crop dropped by around 15 per cent year-on-year to 4.16 mkg. Adverse weather conditions impacted production. “Our expectation is that Darjeeling tea production would be around 6.5-7 mkg this year,” Kanoria said.
Significantly, Darjeeling’s tea industry has witnessed a gradual fall in production for over a decade now. In 2011, tea production was 9.14 mkg, while it was 8.13 mkg in 2016. Production has been hit by climate change, labour issues, lower productivity and profitability, according to industry insiders. Facing financial crises, many planters have sold gardens in recent years.
“Cost of production has risen by at least 10 per cent this year compared with last year, due mainly to a wage hike. However, the average price realisation would be around 10 per cent lower in 2023. It is already a loss-making operation,” Kanoria said.