By Dan Bolton
Several of the world’s top tea exporting countries, including India, Kenya, and Vietnam, may be unable to fulfill early-season orders due to lockdowns and logistical delays.
The Tea Board of India estimates that exports will decline at least 6-8% in 2020 due to lockdowns that are interfering with the initial harvest. The shortfall could be 16 to 20 million kilos if the harvest resumes in May. At 20 million kilos, the decline will result in $64 million in lost sales.
Exports were on a downward track in 2019 at 248 million kilos. In 2018, India exported 256 million kilos of tea.
About 90% of the early tea at lower elevations in the Dooars region of West Bengal is now overgrown and lost. Goodricke Group managing director Atul Asthana anticipates the “entire production from Darjeeling is lost, which is worrying.”
Lifting the lockdown in mid-April on the condition that gardens employ no more than half their regular workforce will permit growers to fulfill at least some of the teas under contract, according to Vivek Goenka, chairman of the India Tea Association. “If everything falls in line, we may not lose the second-flush tea crop that constitutes the bulk of the country’s production,” a senior planter told The Economic Times.
In Vietnam, first-quarter tea exports declined 2.4% in volume and lost 19% in value compared to the previous year. Shipments to China, Taiwan, and Russia were virtually halted. The US is one of the top five destinations that, together, account for 75% of Vietnamese tea. Prices declined 13.5% to $37 million in February, averaging $1.48 per kilo, according to the Vietnam Tea Association. Trading partners are asking for lower prices, delayed delivery, and are even canceling contracts, according to the association.
Kenya saw exports decline by 4 million kilos in February to 40.5 million kilos compared to February 2019 totals, according to the Agriculture and Food Authority. Disruptions in the auction at Mombasa are to blame, as the weather is excellent with moderate temperatures and favorable rainfall in the western and rift valleys. The harvest increased to 49.2 million kilos compared to 31.4 million kilos during the same period last year. Smallholders contributed 19 million kilos to the total. Prices at Mombasa were down, averaging $2.13 per kilo compared to an average price of $2.16 per kilo in February 2019.
Sri Lanka has not ordered a tea garden lockdown. Plantations Minister Ramesh Pathirana said the nation’s tea plantations will be allowed to carry on their operations so long as they adhere to guidelines set by the Health Ministry. To facilitate transactions, the Ceylon Tea Traders Association has switched after 137 years of outcry to online auctions. Banks and the government departments regulating food safety and trade that are essential to export are now open three days a week but operated by half their usual staff.