Agri Business

Tea board mulls selling all Darjeeling tea through auctions

Our Bureau Kolkata | Updated on October 16, 2019 Published on October 16, 2019

Arun Kumar Ray, Deputy Chairman, Tea Board

The Tea Board of India is mulling the possibility of routing the entire Darjeeling tea output on its auction platform. The move, it believes, will help ensure traceability and protect the Geographical Indication (GI) tag. It will also lead to fair price realisation for the tea.

According to Arun Kumar Ray, Deputy Chairman, Tea Board, the proposal will be discussed at a meeting with the members of the Darjeeling Tea Association, at the end of this month.

“The Tea Board would like to intervene to improve the traceability of Darjeeling tea, which has a GI tag. We would want to get 100 per cent of Darjeeling teas onto the auction platform so that we can realise the actual value of the tea,” Ray told newspersons here on Wednesday.

Nearly 50 per cent of the total 8 million kg (mkg) of Darjeeling tea produced across 87 estates each year is exported. Only about 3-3.5 mkg of Darjeeling tea is currently routed through the auction platform. A majority of Darjeeling first and second flush tea is sold privately to overseas buyers at higher prices. The first and second flush put together account for 55 per cent of Darjeeling production by volume, while it accounts for nearly 75 per cent in value terms.

While the average variety of Darjeeling tea fetches around ₹450-500 a kg in the auction, better quality commands prices in the range of ₹2,000-4,000 a kg. There are also instances when the first flush Darjeeling tea has fetched around ₹18,000 a kg in an auction.

In fact, a small batch of speciality first flush Darjeeling tea from the Badamtam estate of Goodricke fetched close to ₹2 lakh a kg this year, making it one of the costliest teas ever sold from the region.

Move to ensure traceability

Though the demand for Darjeeling tea has been on the rise both globally as well as in the domestic market, production has been fairly constant with political unrest and climate issues posing a challenge.

The tea output in Darjeeling was severely impacted in 2017 following a strike called by the Gorkha Janmukti Morcha, which had forced closure of tea estates for nearly four months. The shutdown had not only led to financial losses to the producers that year but also prompted blenders and packeteers to look for an alternative to ‘Darjeeling’.

According to industry sources, a good volume of Nepal teas has been making inroads into the Indian market and is being sold as ‘Darjeeling’ tea. This is impacting fair pricing of the Darjeeling tea, which is GI protected.

The Tea Board move of routing all of the Darjeeling tea through its auction system would help address this issue by keeping tabs on how much tea is produced and sold, an industry insider said.

Published on October 16, 2019
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