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Darjeeling shutdown hits tea industry's production, revenue
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Bappaditya Chatterjee | 22 Jun, 2017
The Darjeeling tea industry is expected to lose 20 per cent of its
premium quality annual production and 40 per cent of its revenue due to
the ongoing indefinite shutdown called by the Gorkha Janmukti Morcha,
say tea planters.
All plucking and manufacturing operations in
the 87 gardens of the famed Darjeeling tea have been reported suspended
since June 9.
According to planters, whatever the industry has
lost so far cannot be recovered, therefore the annual production is
expected to take a hit.
According the industry estimates, a
direct loss of more than Rs 100 crore mostly in foreign exchange has
already been incurred till date as leaf tea is an exportable product,
and the industry is looking at a further indirect loss of Rs 150 crore
approximately.
The premium second flush period of production
starts from end of May and lasts till mid-July, and the tea is known for
its muscatel flavour which is produced in June.
"This is a
season for producing high value second flush tea. All the gardens are
closed in the peak season, resulting in a huge loss to the industry,"
Darjeeling Tea Association's (DTA) Chairman Vinod Mohan told IANS.
"Even
if the gardens open tomorrow, our losses will not be curtailed. The
harvest has already been overgrown, which will be of no use. We have to
wait for the next harvest, which will take another eight to 10 days,"
Mohan said.
The first and second flush are considered as the
premium flush contributing about 45 per cent of the annual production,
and the tea produced in these seasons is mostly exported, earning the
country vital foreign exchange.
"Literally, there was no harvest
in the second flush period which contributes about 20 per cent of the
annual production and around 40 per cent in annual revenue of the
industry," DTA's Secretary General Kaushik Basu told IANS.
"Due
to the uncertainty, we do not know how much would be produced in the
second flush period. We may lose the entire harvest during this period,"
Basu said, adding that the loss may result in closure of the gardens
even after normalcy returns.
In the last calendar year, the Darjeeling tea industry produced 8.13 million kg of tea.
The
industry apprehends that if the tea gardens start operation even now,
some crop that could be harvested would be of inferior quality, and this
may result in a drop in price realisation.
"Plucking of tea
leafs is done on a weekly basis. If it is not done, the raw materials
get spoiled. The industry will not be able to produce the superior
quality tea and, accordingly, the price realisation would be impacted,"
DTA's former Chairman Ashok Lohia told IANS.
He explained that
there were certain gardens which were famous for second flush tea while
some were known for the first flush tea, depending on the location of
the gardens.
The second flush contributes to over 50 per cent of annual revenue in some gardens.
The industry was heavily dependent on the premium flushes for their profitability.
Post
second flush, the Darjeeling tea harvest in monsoon and autumn is
mostly sold at about or below cost of production. Tea produced during
these periods does not woo foreign buyers.
Apart from the present political turmoil, the industry has faced challenges in the first flush period in March as well.
"In
the last five to six years, we have noticed the first flush production
was more or less affected owing to erratic rainfall triggered by climate
change. We also faced a drought-like situation in the first flush
period in the current year. The quality has also been affected and so is
the price realisation."
"The industry believes that the price
realisation was down by 10-15 per cent in the first flush in the current
crop season," Basu said.
Along with political turmoil, the
industry has also been facing challenges in the domestic retail market
as Nepal tea is being sold in the market as Darjeeling tea, which is an
infringement of the Geographical Indication protocol and Intellectual
Property Rights.
"Nepal tea is imported in India as part of
Indo-Nepal free trade agreement. We have no issues with that. But what
is hitting the Darjeeling tea industry in the domestic market is the
misuse of the brand equity of Darjeeling tea. Nepal tea is being sold in
the name of Darjeeling tea," Basu said.
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