By Dan Bolton
Tea producers in Darjeeling, in the Himalayan foothills, saw good yields in the first flush but weak demand and now face lower prices as the second flush gets underway.
Foreign buyers appear hesitant to make offers for teas that in previous years were in high demand. Japan was singled out for its “lukewarm” demand, according to press accounts in The Calcutta Telegraph. The Japanese normally purchase about 1 million kilograms annually, a quantity down by half this year.
Prateek Poddar, director of Poddar HMP Group, owner of Namring garden, told reporters, “There is hardly any demand this year from Japan. Prices are low too. I have not seen such a situation in a decade.”
Prices for second-flush teas are down 28% according to reports in the Economic Times which noted a fall-off in sales to German tea companies. Auction prices for good grades of Darjeeling were $5.87 per kilo in mid-July, down from $8.14 during the same period last year. The lower volume is due in part to high stocks of tea purchased last year.
Japan buyers primarily seek out first flush teas that are often blended and sold at high prices in a green-tea consuming country where black teas are considered exotic. Darjeeling presents as an oolong in the cup, a prized style favored by local connoisseurs.
Atul Asthana, managing director & CEO of Goodricke Group, said “There are many external factors which we cannot control. We are focusing on producing quality tea and hoping that buyers will return,” he said, adding that major blenders were absent.
The prices of broken leaf and fannings, which are consumed in the domestic market, and to make tea bags have been hardest hit with prices down an average $1.63 (INR112) per kilogram. Close to 40% of tea remained unsold in the tea auction, a sign of tepid demand.
The exact reason for the slump in prices for first flush teas, which are down 34% compared to last year, is unknown but locally attributed to the 108-day strike in 2017 that led many retailers to switch from Darjeeling to other tea origins. These include high-grown Sri Lankan teas, Indonesian teas, and those from Nepal which are cheaper and have a taste profile very close to the teas produced in the 87 gardens in Darjeeling. Production totals are expected to fall well below the 8.5 million tons normally harvested.