Darjeeling tea loses Rs 100 crore annually as Nepal import rises : 8 June 2017

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The Darjeeling tea industry has been estimated to be losing at leastRs 120 crores every year because cheap leaf imported from Nepal is taking its place, though under the rubric ‘Darjeeling tea’, and at a premium at that.

Industry officials have estimated the Darjeeling tea industry’s annual market size to be more thanRs 600 crores, which could have crossed theRs 700 crore mark had India not been importing tea from its Himalayan neighbor under the Free Trade Agreement.

One of the costliest varieties of tea in the world, Darjeeling’s Indianised Camellia Sinensis is produced in a limited quantity, at just above eight million kg,
each year. But its quality keeps its average prices above the Assam or Nilgiri varieties. However, the price is bound to fall if the supply of this variety increases in the domestic market.

Industry estimates suggest that 2-2.5 million kg of Nepal tea enters India through the legal route under the FTA, which encourages trade in agricultural commodities. However, the major problem is that Himalayan orthodox tea, produced in Nepal, looks similar to Darjeeling tea and even packeters and blenders find it difficult to differentiate them. “It is only after brewing that one can differentiate between the two”, said Ashok
Kumar, managing partner, Goomtee Tea Estate. Industry officials say that while the tea is procured by importers, who distribute and bill it as Nepal tea, somewhere down the distribution chain the tea leaves gets branded as Darjeeling tea before they enter the retail chain. “As Nepal tea gets branded as Darjeeling tea in loose tea sales, people start thinking that the supply of Darjeeling tea has risen, which is not the case. This way,
the effective price of Darjeeling tea falls in the retail market,” said SS Bagaria, former chairman, Darjeeling Tea Association.

Prices of Darjeeling tea are at least 60 per cent more than those of the Nepal variety.

The import of Nepal tea surged fromRs 105.50 crore in 2012-13 toRs 111.84 crore in 2014-15 andRs 140.89 crore in 2016-17.

The problem of cheap Nepal tea eating into the share of Darjeeling tea in the export market has been plaguing the industry for long. The Tea Board of India has convinced German blenders not to mix Nepal tea with that of Darjeeling, the consequence is losing the ability to use the hallmark Geogr-aphical Indication (GI) tag.

“The problem has been contained in the international market. But in places (in India), where loose tea is sold by local blenders, the problem persists,” an industry executive said.

Loose tea doesn’t legally guarantee the authenticity of the Darjeeling produce because it doesn’t carry the GI tag.Bagaria said while Darjeeling producers followed the Plant Protection Code and the tea was certified by the Food Safety and Standards Control Organization, the produce from Nepal was not, and this raised questions on its quality and effects on health.

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