Weaker Rupee Robs Indians of Darjeeling Tea, Turns it Hot for West.

The Economic Times  

New Delhi, 15 July 2013

Indian consumers used to Darjeeling tea may not get the best of the brew this year. Rupee devaluation has prodded Darjeeling tea producers to step up exports and shift the focus from domestic market to global markets. For a few Darjeeling varieties, overseas buyers have shelled out Rs 9,000 per kg and there is no dearth of export orders. The recent entrant in the market for Darjeeling tea is the US, which is ready to pay a premium for quality Darjeeling tea. SS Bagaria, chairman of Darjeeling Tea Association, said “The weakening of the rupee has worked in the favour of the Darjeeling tea industry. Darjeeling has always been dependent on export markets. But in the recent times we were also stepping up our focus in the domestic market as the purchasing power of Indian consumers has increased. But following rupee devaluation we are now focussing more on export markets. Moreover, the US has entered the market and even tea boutiques in the UK are buying good volumes of Darjeeling tea.” The production of Darjeeling tea has increased in June by 10%. Though the season initially started with low production, it picked up in June. “This has also given us an opportunity to export more,” added Bagaria. J Kalyansundaram, secretary of Calcutta Tea Traders Association, said: “Darjeeling teas are fetching good prices this year. There is a demand for Darjeeling teas in the domestic as well as the export markets. Companies and exporters are buying Darjeeling teas.” The broken and fannings varieties of Darjeeling teas are being sold in the region Rs 350 to Rs 500 per kg. Darjeeling tea production is expected to go up this year compared to 2012. Last year, Darjeeling produced around 9 to 9.5 million kg of tea. Bagaria said the euro zone crisis has not affected exports of Darjeeling tea to Europe, one of the largest consumers of premium Darjeeling tea. “Some of the teas have fetched 100 Euros,” he said. This will be definitely a good year for Darjeeling tea companies, said Bagaria. Generally, 40% of Darjeeling teas, which have the unique muscatel flavour, are exported. The rest 60% are considered as rains teas and do not make much headway to export markets. The DTA chairman said that the industry is happy as the US has started picking Darjeeling tea. “The US has been traditionally a ready-to-drink market. They prefer ice tea. But now a section is looking at tea as a hot beverage. Our endeavour will be to position Darjeeling tea in the hot beverage category,” he added.