As South Indian tea gains overseas markets amidst a slump in North Indian output on weather issues, stakeholders expect the prevailing demand for the orthodox variety, especially the Nilgiris to sustain in the near term. As per the Tea Board’s provisional data, the South Indian exports are up by over 11 per cent in volume during the April-December 2023 period at 73.47 million kg, while North Indian shipments are down by about 7 per cent at 105.95 million kg on availability issues.

“There is demand for orthodox teas from the South and the prices have gone up from ₹180-190 a kg levels, a couple of weeks ago to ₹240-250 levels” said Dipak Shah, Chairman, South India Tea Exporters Association.

Not much left

Shah said in North India, there’s not much of tea left as production has stopped due to weather issues. “Only whatever has been left out is selling. There’s hardly any tea that’s coming in the public auctions. That demand has to come for the South Indian orthodox at least for another 3 months or so till the North Indian crop comes. The Assam crop will not come before May end and that also will be opening at a high price. Chances are that the orthodox teas in India will see a good market. But, how good it is difficult to pronounce,” Shah said.

“Definitely, we are expecting more enquiries for the Nilgiris orthodox teas going ahead due to the production issues in North,” said N Lakshmanan Chettiar of Golden Hill Estates in Coonoor. In Darjeeling, where the truant weather has impacted the production, the producers may need long term funding for recovery. “As far as near future is concerned, only area where you can match Darjeeling teas to a large extent is Nilgiris orthodox” Lakshmanan said adding that the producers in South have to maximise good orthodox production to take advantage of the opportunity.

The demand for South Indian orthodox is mainly from Russia and to some extent from Europe and small quantities from US. Though Iraq has been purchasing good quantum of teas, but of late, they have been buying more of CTC teas rather than orthodox, Shah said. The prices of CTC teas have also moved up by about ₹10 when compared to a month back, he said.


However, a top official of a large South Indian manufacturer said at the moment everything was a challenge. “Iran, Saudi Arabia, Russia, Middle East, which are major buyers of orthodox teas, have reduced exports with a shortfall of 25 million kg than last year”. He attributed the reasons to geopolitical situations and sanctions. Besides, the Sri Lankan tea making inroads into the Iran market through barter arrangement has had a major impact on Indian teas, witnessing decline in exports..

For the time being, Iraq has started purchasing orthodox teas from the Indian market, giving a slight improvement to the situation. “We don’t know how the emerging trend is going to sustain unless the traditional markets like Iran, Russia, Saudi Arabia revive their imports”, the official said.

The Indian tea industry, according to him, is now facing one of the major crises with declining CTC prices and subdued export demand for orthodox varieties. The sector is also having lower production and it is likely to worsen mainly because of continuing dry spell across production regions. The cost of production is going up while the prices are nosediving. The demand now is only for whole leaf and large brokens varieties which constitute only 30-40 per cent of the production, while the remaining 60 per cent have no demand in the market.