India Tea Price Watch

May 22, 2021

In the week leading up to the second International Tea Day lockdown logistics has taken centerstage as across the country, lockdowns to contain the COVID 19 pandemic has impacted the commodities industry. The Kochi Tea Trade Association has asked that transport of auctioned tea from trading centers be allowed, despite lockdown restrictions. While tea has been classified as essential commodity, and is exempt from restrictions, there seems to be some confusion owing to lack of clarity in what is allowed or not. With further lockdowns in the Nilgiris this week, and non-availability of people to load the vehicles to transport tea, things remain chaotic. At the moment, Sale 21 auctions across the country are likely to be cancelled.   

SALE 20

In the north, Siliguri auctions saw good demand for CTC leaf and CTC dust, from regional packeteers and blenders. Tata Consumer Products has been active. At Kolkata, orthodox saw good sale with 98% sold. Of the Darjeelings on offer, about 83.73% of the offerings was sold. Guwahati saw a marginal increase in prices for CTC leaf, Dust and Orthodox. Guwahati auctions saw some handmade tea from Birjhora which sold for about INR 350. A limited edition imperial oolong from Doomni sold for INR 1502 and three invoices for whole leaf tea (green tea) from Mouling estate in Arunachal, sold for over INR 400.

In the south, Coonoor was the most active in sales, with the highest volume on offer for any auction center, for the year 2021. About 2.4 million kilos was on offer with about 56% sold. Dust still remains most sought after categories. Kochi saw good demand for orthodox leaf, with 83% sold as exporters to CIS and Middle East lent fair support. About 75% of CTC leaf was picked up with the major packeteers being the main buyers. Compared to sale 19, Good Nilgiri Leaf saw marginally higher prices from the previous week. Part of this is attributed to Supplyco and INDCOSERVE who have been purchasing tea to meet the demand for distribution of essentials in food kits. This is thought to have created the hike in prices as well. Also in Coonoor, 109 kilos of green tea was on offer did not find takers.

PRICES FOR SALE 20

India Tea Price Watch – May 22, 2021

Source: India Tea Board | India Tea Auctions

• Q|A Abhijeet Hazarika, on application of technology using SAIL model: Surveillance-Analytics-Intervention-Learning
• Q|A Raj Barooah, Director, Aideobari Tea Estate
• Q|A Sujit Patra, Secretary, Indian Tea Association (ITA)

*New audio uploaded 5-26-2021

Sujit Patra serves as secretary of the Indian Tea Association (ITA). He is directly involved in multi-functional areas like domestic and overseas tea promotion and liaison with various government departments and embassies. Here he discusses the impact of COVID-19 on India’s tea industry and the long-term challenges posed by oversupply and low prices during a period when the expense of labor is driving increases in the cost of production.

Indians are Slowly Attracted to Orthodox Tea

By Aravinda Anantharaman

You recently tweeted about the challenge of oversupply and lower demand. Where do we stand with regard to production, quality, and markets today – both export and domestic?

The following table will give you a broad picture of the Indian tea industry:

How has COVID changed the demand for tea from export buyers? 

There is no study done in India so far. All are speaking on the basis of their sales or experience. However, tea consumption is in two sectors – ‘At Home’ which is 70-90% of total consumption and the balance is ‘Out of Home’ consumption. During the lockdown, Out of Home consumption declined to almost ‘zero’ due to the shut down of restaurants, hotels, colleges, etc. However, ‘At Home’ consumption increased to a great extent.  The ITA, Tea Board, Ministry of AYUSH, and several companies went to social media and highlighted the health benefits of tea, its immunity-boosting power, etc. It appears that this has boosted tea consumption during the COVID pandemic. Many tea packeteers have reported that there was unexpected high demand for their packets during COVID

How are the traditional markets for orthodox tea faring? Who are the new markets we could target and reach? Is the urban Indian market also primed for orthodox and specialty tea? 

Orthodox tea is a specialty tea. It needs expertise to manufacture. It gives low cuppage (200/250 cups per kg vs. 600 cups/kg in CTC teas). Almost the entire Indian tea market is of CTC teas. But due to better living standards and growing per capita income, Indians are slowly attracted to orthodox teas nowadays. However, the global market gives a good opportunity for orthodox tea. 40% of the global market is for orthodox tea, which is being serviced by Sri Lanka, India, Vietnam, Indonesia, etc. Because of the higher cost of production, risk in marketing, and the vast Indian CTC market, Indian tea producers are reluctant to make more orthodox teas although the product is likely to fetch a better price. India needs to put more effort to market more orthodox tea in the global market.

In the last few years, Indian orthodox tea production has increased from 85/90 m.kg to 130/140 m.kg. Orthodox tea export has increased to Iran, Russia, the USA, Germany. While these markets needed to be served more with renewed efforts, initiatives need to be made to capture other orthodox markets like Iraq, Syria, Libya, Chile. The ITA has been making several suggestions to the Tea Board and Commerce ministry for delegations (after pandemic), more interactive meets, promotion in social media, etc. to boost Indian tea exports and to balance the supply of product-mix in the internal market and therefore price stabilization.

In terms of pricing, are auction prices still the benchmark? How do you benchmark Darjeeling tea or prices of other specialty teas?  

Yes, the auction price is still the benchmark. Over 50% of all Indian tea is passing through the auction system in India. But the system needs certain modifications for proper and transparent price discovery. This is only possible through a consultative process amongst all stakeholders led by Tea Board. Darjeeling is a specialty tea. Like all niche products, Darjeeling or other specialty teas like white tea and oolong need special care.  

What are your expectations for 2021? 

We expect better demand on the domestic front and export. If the government and Tea Board help the industry sort out issues, promote tea in overseas markets, incentivize exports by defraying additional costs incurred on shipment, taxes, etc, Indian tea export will increase to a great extent in the next two, to three years.

Q|A Raj Barooah: Assam’s Challenges

India Tea Price Watch

May 15, 2021

COVID continues to dominate the news while weather shows some signs of relenting in Assam. With lockdowns in place across the country, there is an impact on both, work on the gardens and in the supply chain.

In the Nilgiris, while tea gardens are exempted from lockdowns, media reports indicate that movement of goods was affected due to restrictions as warehouses and offices are closed. Most commodity markets, including tea, seem to be grappling with the supply chain logistics, both intra- and inter-state.

Assam, one of the regions that has been in the news due to COVID hitting the tea gardens, also saw the appointment of a new chief minister last week, following the recent elections. Himanta Biswa Sarma, the newly elected chief minister was most recently the state’s health minister. Priority among tea producers is to ramp up vaccination on the gardens to contain the spread. Tea gardens have been allowed to function following strict protocols. However, new SoPs have been issued on COVID management for tea gardens, taking into account available and accessible health care: No home isolation will be allowed for those who test positive, spaces such as community halls or school rooms which have toilets, electricity and safe drinking water are to be converted to COVID Care Centres to house those who are COVID positive but asymptomatic. The report also indicates that any garden where the daily number of new COVID cases is 5 or more, or has a cumulative active count of 20 positive cases will be declared as a containment zone. Depending of the size and geography of the garden, the containment may be limited to the workers’ quarters or specific sections of the estate.

Currently lockdown rules in Assam include a 15-hour curfew from 2pm every day. In a letter to the state government, the North Eastern Tea Association (NETA) has requested that COVID restrictions for workers and vehicles of tea estates within a 5 km radius of urban and semi-urban areas be relaxed. The letter also points out that transport of green leaves from gardens to factories and also transport for workers who don’t live on the gardens necessitates this relaxation.

Sale 19

At the auctions, there was good demand for teas and prices remained steady. Coonoor auctions for Sale 19 were held on Saturday as Friday was closed for the festival of Ramzan. Kochi saw good participation from INDCOSERVE and Supplyco for Dust, leading to price increase by INR 10-20 per kg. In leaf, CTC leaf fared better than Orthodox leaf with 98% offering sold. But prices for leaf dropped from INR 156 last week to INR 149. CIS and West Asia buyers lent fair support. In Coonoor, 124 kg of green tea on offer and sold for INR 301. Guwahati auctions also saw green tea offerings, with invoices from Duklingia fetching in the range of INR 350.

PRICES FOR SALE 19

India Tea Price Watch – May 15, 2021

Source: India Tea Board | India Tea Auctions

• Q|A Raj Barooah, Director, Aideobari Tea Estate
• Q|A Sujit Patra, Secretary, Indian Tea Association (ITA)

*New audio uploaded 5-18-2021

India Tea Price Watch

May 8, 2021

Even as the weather has finally relented, the pandemic is still raging. Worryingly, tea gardens in Assam have reported Covid cases among tea workers. Zaloni Tea Estate was the first to report an outbreak. Four gardens – Zaloni, Maijan, Pratapgarh (Nilpur) and Borsapori have not been sealed as containment zones. As of the weekend, work was suspended in both Zaloni and Nilpur. Indian media reported 500 positive cases across 90 gardens. Assam has 800 tea gardens and community spread is a pressing concern. The Assam Tea Tribe Students Association (ATTSA) issued a press release calling Covid Care Centers with oxygen support made available in each garden, vaccinations for workers and families, and distribution of N-95 masks. Meanwhile, lockdown has been enforced in the Nilgiris this week but tea gardens will remain operational. In Darjeeling, the first flush has ended on a better note as rains have arrived and there is optimism around the second flush. Sale 18 also saw the highest average price this season for Darjeeling, at INR 924.26. In markets, the south saw good sale as north Indian yields remained low.

PRICES FOR SALE 18

India Tea Price Watch – May 8, 2021

Source: India Tea Board | India Tea Auctions

• Q|A Raj Barooah, Director, Aideobari Tea Estate
• Q|A Sujit Patra, Secretary, Indian Tea Association (ITA)

*New audio uploaded 5-10-2021

Tea Price Report

Price volatility is an ongoing concern, which is why Tea Biz publishes the weekly Tea Price Report. The report tracks average prices at major tea auctions and lists prices for specific types of specialty tea, drawing on many sources including the China Tea Marketing Association which provides a benchmark for the 10 teas from the world’s largest tea exporting country. Listen free to the weekly summaries below and click Price Watch for a full report analyzing trends with additional data sets and graphs. Si Chen researches and Dan Bolton writes the Weekly China Price Watch. Photo of white tea drying in the sun in Fujian courtesy China Tea Marketing Association (CTMA).

Caption: Huangshan Maofeng from Anhui Province

China Tea Price Watch

May 4, 2021

Harvest conditions are ideal across China with the exception of Wuyishan, in Fujian Province where colder weather has delayed the harvest. The first appreciable quantities of Da Hong Pao (Red Robe) reached the market this week. Chinese President Xi Jinping visited Wuyishan National Park March 22, and an eco-friendly tea farm in Nanping City where he urged local growers to continue their “pivotal role” in rural revitalization. Xi called for coordinated efforts to promote tea culture, development of the tea industry and use of technology in the sector. Xinhua reported that President Xi interprets cha, the Chinese character for tea, as a symbol of man co-existing with nature among the grass and woods.

April 28th, 2021

Harvest conditions are ideal in China, only the Wuyishan tea Da Hong Pao is not ready for plucking.

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April 20th, 2021

FOCUS: WHITE TEA

White tea is one of China’s six top tea exports and represents about 2% of the tea consumed in China. Fuding in Fujian Province, is the heart of white tea cultivation which dates to the Tang Dynasty more than 1000 years ago. Two-thirds of the city’s population is employed by the tea industry. The crop in 2020 was valued at RMB 11.95 billion (more than $1.8 billion), up 12.2% compared to RMB 10 billion earned in 2019. The 25,300 metric tons produced last year accounts for half of China’s white tea production. Yinzhen is the most popular style for export. The tea is experiencing a difficult harvest due to early season damage from cold weather. Demand remains strong in both domestic and export markets with the shortfall boosting prices up to 35% higher than last year.

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April 13th, 2021

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 April 6th, 2021

Plucking started early and warm weather is expected to extend the harvest. In Fuding white tea is drying in the sun. Xianjing Cao, co-founder Taimu Tea Valley, writes that the purchase price of fresh tea leaves in 25% -35% higher compared to the same period in 2020. According to a report from local supplier Pin Pin Tea, last year’s drought in Fuding resulted in a lower germination rate, and a large number of tea buds were frostbitten due to the extremely cold winter. Both factors lowered tea yield. The combination will result in a significant increase in the price of Fuding White Tea especially the Silver Bai Hao Yinzhen (Silver Needle), writes Cao.

Plucking is at 50 percent of the Anji Bai Cha tea gardens in Zhejiang. Anji Bai Cha is a green tea that takes its name from a tender spring bud that presents as white in color. Anji County this year is expected to produce 2,000 metric tons. Plucking is underway in eight of 10 major tea producing regions.

Despite lockdowns and safety precautions due to COVID-19, China harvested 2.97 million metric tons of tea in 2020, up 7.1 percent over 2019, according to the National Bureau of Statistics of China’s Statistical Communiqué on 2020 National Economic and Social Development.

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March 30th, 2021

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March 23th, 2021

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March 17th, 2021

*N/A indicates insufficient quantities harvested to establish a reliable price range.
Source: China Tea Marketing Association  Prices are reported by tea type in representative growing regions. Price calculations are local, reflecting domestic prices averaged from many different farms to determine a range. In general the lower range describes teas available in quantity. The high range is influenced by scarcity but in China, many desirable, high-value teas are grown in large quantities. Averages are calculated in Chinese Yuan and converted to USD. Export prices vary greatly from the domestic averages listed above. China rates weather and labor conditions on a scale of 1-5, with 5 indicating ideal. Special thanks to Si Chen in Beijing for translating.
Copyright 2021 Tea Biz www.tea-biz.com

Send comments and suggestions on how to improve this report to: Dan Bolton