The Hindu Business Line : Hindi Chini Chai-Chai

More than a hundred-and-fifty years after the British botanist Robert Fortune introduced tea to India from China, one Indian tea company is audaciously attempting to sell Indian tea back to the "mother country".

Siliguri-based Lochan Tea Ltd has entered into a marketing arrangement with Beijing Dongli Garden International Trade Co. Ltd to introduce the delights of a steaming hot cup of Darjeeling chai to a nation of primarily green tea drinkers.

Speaking at the launch of a range of Indian tea products in Beijing, Mr Rajiv Lochan, Chief Executive Officer of Lochan Tea Ltd, announced to a hundred-strong audience of tea industry officials and aficionados that, "Tea came from China and now I have brought your tea back to you."

Weak home demand

Given that Indian tea has of late been suffering from sluggish demand both at home and abroad, several tea producers from India have been looking to the Middle Kingdom in recent years, hoping that China, with its huge market for the drink, might come to the rescue.

Thus in 2004, seven tea exporting companies attended the China Tea Expo held in Beijing, but two years on Lochan is the first and only company to enter into a commercial contract with a Chinese partner. The idea is to start small but think big. Thus, to begin with Lochan has given a tonne of Darjeeling teas from the Okyati and Makaibari estates to Dongli to sell. "But I believe that one day we will be able to export in the millions of kg to China," says Mr Rajiv Lochan. "It will be China not Europe that will be our biggest market."

While he acknowledges that it is not going to be easy to convert the green tea-sipping dragon to savouring a strong cup of black brew, Indian style, Mr Lochan feels that a window of opportunity might be opening up amongst the newly affluent, younger Chinese keen to try out new products and can afford to pay for quality.

Fashion statement

Indeed black tea with milk and sugar is slowly becoming as much of a fashion statement amongst young, urban Chinese as a cup of Starbucks coffee. The fashion however does not come from India or Western countries as much as from Taiwan where sweet milk tea with tiny balls of taro flour called zhenzhu naicha has been popular for several years.

Black tea accounts for 7-8 per cent of the total tea production in the mainland but it is of a low grade and Lochan Tea is pinning its hopes on capturing the upmarket segment where value is placed on quality. Lochan's products will thus be sold at a pricey RMB128 ($16) per 100 gm.

In fact the upper-end of the tea market has been undergoing somewhat of a renaissance in China of late, marked by the re-emergence of the traditional Chinese tea house, historically a social space where Chinese of all ages gathered to swap news and conduct business. Prices for China's top-end teas are reaching record highs. A pot of top-grade Pu Er tea for example costs a mighty $200 at Beijing's more refined tea houses.

One of the most successful tea house chains to emerge in China is Wuyutai, which has over 100 branches in Beijing itself. Lochan is currently also in negotiations to sell Indian teas directly through this tea-house chain.

China's output

And even as the domestic demand for gourmet teas in the mainland is growing, Chinese tea is taking an expanding share of international markets. Hillsides across south China are being cleared to make way for tea farms, leading to a major expansion of tea production. According to the United Nation's Food and Agriculture Organisation (FAO), China's tea output has rocketed from 300,000 tonnes in 1980 to almost 800,000 tonnes in 2004. It is now the second largest tea growing country after India.

In contrast, India's tea output has actually been declining in recent years, the result of stagnant demand at home and increasing competition from other tea producing nations such as Kenya, abroad. According to the FAO, India's tea production declined by 4.3 per cent to 820,000 tonnes in 2004, partly due to the closure of some 70 tea gardens in Assam.

China also accounts for an increasingly sizable chunk of the global trade in tea. It had overtaken India to become the third-largest exporter after Kenya and Sri Lanka a few years ago. In 2004, Chinese tea exports expanded by more than seven per cent to reach 282,000 tonnes.

In addition to trying to find a market for India's finest teas in China he is also taking Chinese tea culture to India. Mr Lochan recently opened a tea bar in Gangtok called Wuyi Mountain tea house where he serves a variety of Chinese green and oolong teas.

These are early days yet for Mr Lochan's ambitious plans, but for India and China all this cross-border tea-related activity could result in the coining of a new catch-phrase to describe bilateral ties across the Himalayas in the 21st century: Hindi Chini Chai-Chai.

More Stories on : Tea | Insight | Lifestyle

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Art of public posturing

Different strokes

An emerging economic order

Growth versus fiscal prudence

Besieged Blair

Hindi Chini Chai-Chai

Moratorium is `a pre-emptive action' of the RBI

Lalu `express' in full steam

Banks and mega projects