Darjeeling Tea Stocks Soon Depleted

Tea plantation

Stocks of freshly processed Darjeeling are nearly exhausted. Private sales continue through next week but larger quantities needed to sustain the largest brands will soon vanish from auction.

The Darjeeling Tea Association reports that for the first time in 156 years there will be no tea to sell at next week’s auction. Prices for the highly prized tea remaining in the pipeline are rising steeply and retailers can no longer expect suppliers to meet demand after the third week of September.

Retailers should:

Expect big markups as Darjeeling will at best produce only 40 percent of its annual harvest, and that assumes plucking of the popular autumnal teas resumes before the season ends. Tea at auction that normally sells for $15.50 (INRs1000) per kilo is selling for $25 (INRs1500+) per kilo. Wholesalers are expected to charge at least 20 percent more per kilo.

“Scarcity of stocks will undoubtedly result in higher prices and some of it will ultimately be passed on to the consumer,” advises Anupa Mueller, founder of New York-based, Eco-Prima. “Our own strategy is to increase the wholesale business-to-business prices but not the prices to the individual consumer.  That may change as the year continues,” she said.

Switch now to hand processed high-mountain teas from Nepal or Sri Lanka, many with flavors and processing similar to Darjeeling.

“Europe will probably substitute with Nepal since they have already begun doing so,” says Mueller. “In the U.S., this trend is still in its infancy. This may be the year that more Nepal will be sold.  Logistics and import patterns, however, already exist for Darjeeling.  It is not quite that easy to suddenly offer Nepal to the same Darjeeling customers,” she said.

“We are also looking at well-made classic Nuwara Eliya teas (from Sri Lanka) as an alternative, some of them are even being made with Darjeeling’s manufacturing process,” advises TeaSource founder Bill Waddington.

Resist the temptation to market other teas as Darjeeling.

“Small retailers will soon run out of Darjeeling. That is when the price will increase and quality will become inferior. Consumers lose at both ends,” Sandeep Biswas of New Orphan Tea told The Times of India. He cautioned retailers not to tarnish the Darjeeling brand.

Down to the Last Few Sacks

The Times reports that J. Thomas & Co., the world’s largest and oldest tea auctioneer, and two other tea brokers, received only 201 sacks of tea for August auctions, compared to 4,933 during the same period last year.

“In all probability, arrival of Darjeeling leaves will dry up after Sale Nos. 31 and 32. We do not expect fresh tea from any of the 87 Darjeeling estates,” Krishan Katiyal, managing director at J. Thomas & Co., told the newspaper.

Darjeeling Tea Association President Binod Mohan said that Darjeeling has produced only 2.5 million kilos year compared to the 8.5 to 10 million kilos in the past. Last year 6 million kilos were sold in private transactions, mainly to overseas buyers. The second flush, while accounting for 20 percent of the harvest, represents about 40 percent of total revenue, said Mohan.

Goodricke group, which operates eight Darjeeling gardens and is the largest supplier of auctioned tea, sold its last 1,000 sacks last week, according to managing director AN Singh.

First Flush

In past years when there were shortages at auction, Tata, Unilever and Associated British Foods — owners of Tetley, Lipton and PG Tips, and Twinings could substitute high-mountain Himalayan teas from several regions and still market the tea as Darjeeling. That is no longer permitted since Darjeeling earned its Geographical Indication.

Germany and Russia purchased almost all the early-season Darjeeling and their warehouses are well stocked as these teas were shipped prior to the June 9 strike, now it its 46th day.

“Those with discriminating tastes and for those who specifically trade in fresh, seasonal product, 2017 will be available at higher prices,” writes Mueller. “This, of course, applies to those who were fortunate enough to procure 1st and 2nd flush while the season was still alive.”

“U.S. consumers prefer 2nd flush,” she says. “The monsoon plucking gives us the larger volume grades – but those are probably out for this year.  This includes fannings, lower end leaf, green and pre-Autumnal flushes,” she writes.

“Up to now supplies of first flush teas are holding out ok, but looking forward to holding out to next year’s harvest is pretty scary; especially since not picking leaves at all this year (leaving the leaves on the plant) will negatively impact the flushes and growth next year,” writes Waddington.


Nepal’s Opportunity

Camellia Sinensis partner and veteran tea buyer Kevin Gascoyne observes “that any void in the market supply of Darjeeling tea looks like an opportunity for other Himalayan regions.”

“Nepal certainly produces enough tea, almost double that of Darjeeling,” he writes, “but developing in the shadows of Darjeeling’s international reputation for quality, combined with decades of poor marketing and a lack of common voice, Nepal’s tea industry grew up with a general focus on lower grade teas and Darjeeling blend ‘fillers.’

“We now have some very impressive, prime examples of producers in Nepal that are taking advantage of the Himalayan terroir’s potential. They are raising the bar with alternative teas, through increased focus on process and leaf material. Some are producing teas that not only stand tall in quality next to Darjeeling teas but are also pushing things forward in other directions as very unique products,” he said.

“With their principal competitor’s impending lack of supply we see not only an opportunity to sell more tea but also, hopefully, fuel to build the reputation of Nepalese tea as a free-standing, solid brand with a more prestigious future,” he said.

No End in Sight

Katiyal at J. Thomas & Co., said that during the Himalayan community’s attempt to establish statehood during the mid-1980s supplies ran short for about six weeks but gardens continued to function. Once the strike was lifted, supplies normalized.

This time the situation is much more serious, he said, calling it a “deepening crisis.”

Grower Rajiv Lochan, founder of Siliguri-based Lochan Tea Ltd., worries that yield will fall because plants are no longer being watered and the requirements of soil maintenance, warding off insects, aggressive plucking to clear the plucking table will at best occur amid “labor conditions and the resultant terseness that will lead to friction, resulting in low levels of co-operation and morale.”

“If the Hill parties don’t lift the strike soon, the tea supply crisis will spill over to next year. Even if workers returned this week it will take two and a half months to resume production,” explains Binod Mohan. Timing is critical as the tea bushes are now overgrown and will require extensive pruning and maintenance without which the entire 2018 crop will be lost.

Sources: Times of India