Cup of woes: Darjeeling tea production slips to near two-decade low

Figure is even marginally lower than in 2020, when a nationwide lockdown was imposed to contain Covid-19; Tea Board chief says output has gone down because due to old bushes

Darjeeling tea production stood at 6.6 million kg (mkg) in 2022, a two-decade low barring 2017 when the gardens had to shut down for 104 days due to the Gorkhaland agitation.

According to data available on the Indian Tea Association (ITA) and Tea Board websites, the production figure is marginally lower than even 2020 output, when a nationwide lockdown was imposed to contain the Covid-19 pandemic, resulting in crop loss. And yet, the drop in production was hardly unexpected – Darjeeling’s cup of woes has been brimming for a while now with production and demand on a downward spiral.

Data shows that Darjeeling tea production has been consistently below the 10-mkg mark since 2009, which used to be 10-12 mkg and even higher in the earlier years. Climate change adversities, labour absenteeism, low productivity and financial stress are the primary factors dragging down production.

Tea Board chairman, Saurav Pahari, said that Darjeeling production has gone down because of old bushes which have not been replanted or rejuvenated. “Climate change adversities will make the tea flushes irregular, but owners need to prepare for it and take preventive measures. They have to take a long-term view of the gardens.”

It’s the right blend of rainfall and sunshine that makes or breaks Darjeeling. But climate change has made rains erratic. S Sannigrahi, senior principal scientist, Tea Research Association, Darjeeling Advisory Centre, said that the cold period is getting prolonged and winter rain is often missing resulting in drought-like conditions. “This has been impacting production of first flush.”

Falling demand

But what is perhaps worrying planters is that it’s not just production which is dwindling, but demand as well.

“We have lost markets and the industry is suffering. The present geo-political situation has resulted in less demand for premium teas from Europe,” Ashok Lohia, chairman, Chamong group, which produces about 1 mkg in Darjeeling and is the largest producer of Darjeeling tea, said.

But even with this low level of production the industry is saddled with 10-15 per cent unsold stocks, he added.

Goodricke Group managing director and chief executive officer, Atul Asthana, said, exports were low and the business was in very bad shape at the moment.

“There is no demand in the domestic market because of the influx of teas from Nepal. Some kind of financial support from the government is required to stop the situation from deteriorating further,” he added.

2017 strike

What possibly broke the back of the industry is the Gorkhaland stir in 2017. Arijit Raha, secretary general, Indian Tea Association (ITA) said, the prolonged closure coincided with the high quality second flush period, which generates substantial export revenue to support the year’s operations. The financial impact, he said, was around Rs 300 crore and its impact is still being felt today.

As production fell to 3.21 mkg that year, cheaper Nepal teas (with properties similar to Darjeeling) made inroads in the export and domestic markets.

What’s more, prices have remained stagnant. Darjeeling tea auction prices remained stagnant during the last seven years with a CAGR of 0.33 per cent amidst rising cost of production, Raha pointed out.

“Input costs have increased at a CAGR of 9 -12 per cent during the last decade causing acute financial stress to the tea sector. Workers’ wages have increased by 32 per cent in the last three years. As labour costs constitute 60 per cent of the total cost of production, this has increased the cost significantly,” he added.

The way forward for Darjeeling tea? As planters search for answers, Tea Board chairman said, Darjeeling must eke out a niche export market for itself. “Marketing of Darjeeling tea in the international markets by estate owners is essential.”