“The demand for black tea in China was increasing very fast, which increased our hopes for better business. But now, we are incurring losses. Iran, which was one of the biggest buyers, is not importing tea, due to which prices are falling. The losses may increase in the coming time,” said Dr Hrishikesh Rai, deputy director, Indian Tea Board. He added that the Coronavirus outbreak has been affecting tea exports, which could also affect its production. 

Due to the novel Coronavirus, Indian tea prices have fallen considerably and the exports have been held back. Besides low prices and the increasing cost of production, the tea growers have received another blow. Iran, China, and Germany are the largest buyers of tea in India. Of these, China and Iran, and many other countries have completely banned tea imports from India. As a result of this, the price of tea, which was Rs 200 a kg has now reduced to Rs 100-110 a kg.

Coronavirus, that has spread to 145 countries, has claimed more than 8,900 lives across the globe. In India, around 169 people have been affected and three have succumbed to the disease. But besides these counts, there are millions whose lives and livelihood are getting affected. The Coronavirus outbreak is wreaking havoc in the markets across the globe as trade between countries is getting severely affected. The tea industry in the country, which employs about 30 lakh people and which carried out a business of Rs 3,740 crore in 2019, has been affected.

Bijoy Gopal Chakraborti, president of the Small Tea Growers Association of India, West Bengal, informed us that usually during this time, plantations receive bulk orders for the entire year, especially in Darjeeling tea gardens. “The export has been affected. We hope the situation improves by April 15. If it doesn’t, then our condition will worsen. The price of tea has gone down by about 30 to 40 per cent last week,” he said.

“India now has a stock of 5 crore kgs of tea from the last year. This has added to our woes. We couldn’t consume last year’s yield. How are we going to use this year’s yield?” asked Gopal.

China and Iran have stated that currently they have more than two months of stock and would comment on the imports only after April. Mohit Agarwal, one of the major tea exporters and managing director of Asian Tea Exports said: “The prices of tea leaves have reduced to Rs 120-130 per kg, which had been Rs 200 per kg during the same time last year. Exports to China and Iran have been held back. At the same time, there is a lot of stock left from the last year. Due to this, prices are decreasing in the market.”

“If Iran and China do not resume their tea imports and the situation remains the same, exports are going to be severely affected this year,” he added.

According to the Indian Tea Board, China imported 1.345 crore kg of black tea leaves from India in 2019. At the same time, it became the biggest buyer of Indian black tea. China itself cultivates green tea. The demand for Indian black tea in China has risen by four times in the past five years. “In 2014, China imported 36 lakh kg of black tea from India. No consignment of tea has gone to China after January 25. No one has any idea about the next consignment,” said Mohit.

According to the Indian Tea Board, 95 per cent of the country’s tea is produced by Assam, West Bengal, Tamil Nadu, and Kerala. With a production of 701 million kg, Assam is the largest tea producing state in the country followed by West Bengal, which produces 344 million kg.

Many tea gardens in India, which is the second-largest producer of tea in the world, are already affected. If the trade with the other countries stops, the crisis will increase.

According to the tea board, 18 per cent of the tea gardens in India are in a deplorable state. There are tea plantations in 16 states of the country.
Vishal Shah, manager (foreign sales) of Jai Shree Tea Industries, the world’s third-largest tea producing company, said: “The exports that have been stopped by Germany and Japan owed relatively less to Corona’s impact than to excessive production. But because of the coronavirus, customers from other countries are not coming to India. This is the time when they visit the tea gardens of Assam and Darjeeling and place orders after tea tasting. So, its effect would be evident in the coming time. Tea plantation owners may find themselves in turmoil.”

“If the situation does not improve in the coming 15 days, that would bring much trouble. Exporters like us may also suffer a big setback,” added Vishal.

The first 11 months of 2019 witnessed a decline in the tea exports from 2018. According to the tea board data, tea exports during January and November, were 22.77.1 lakh kg compared to 23.13.6 lakh kg during 2018.
 
Vidyananda Barkakti, advisor to the North East Tea Association, Assam, said: “The tea, right now, is in the tea gardens, but the orders were about to begin. We had barely overcome the losses due to frost when we started facing this Coronavirus. The coming 15 days are crucial for us. If things do not change, this year would be catastrophic for us.”