Tea Exports Drop in Initial 5 Months of FY 2023/24

Nepal’s tea exports have experienced a notable decline during the initial five months of the fiscal year 2023/24, according to data released by the Department of Customs. The figures reveal that Nepal exported 7,181 tons of tea valued at Rs 1.87 billion during this period, in contrast to 10,065 tons worth Rs 2.23 billion in the same timeframe in the previous fiscal year.

The primary cause behind this decline has been identified as farmers holding onto their tea stock, anticipating better prices in the future, as reported by traders. Interestingly, special tea varieties like green tea, white tea, gold tea, and silver tea, known for commanding higher prices in the international market, witnessed a significant decrease in exports.

Despite a strong international demand for Nepali tea, local producers are grappling with challenges in exporting their products. Nepali farmers allege that Indian traders exploit this situation by purchasing Nepali tea at around Rs 550 per kg from them and subsequently selling the same product to international buyers for as much as Rs 3,000 per kg.

Nepali farmers predominantly cultivate CTC (crush, tear, curl) and orthodox varieties of tea across 20,237 hectares in 30 districts. The tea industry in Nepal boasts around 160 tea gardens, engaging over 17,000 people. Notably, major production centers are concentrated in districts such as Jhapa, Ilam, Panchthar, Terhathum, and Dhankuta in eastern Nepal. Tea is also grown in other districts like Bhojpur, Khotang, Chitwan, Sindhuli, Parbat, Kavre, Gorkha, Dolakha, Lalitpur, Ramechhap, and Pyuthan.

Nepal’s annual tea production capacity is estimated at approximately 26,300 tons, with orthodox tea constituting about 6,500 tons, green tea around 730 tons, and the remainder being CTC tea.

Nepali tea reaches various international destinations, including Australia, France, Canada, Denmark, China, Germany, Japan, Italy, the Netherlands, the United States, Poland, Sweden, Thailand, Taiwan, and India.

To address these challenges, the Nepali government has initiated branding exercises aimed at enhancing the competitiveness and accessibility of Nepali tea in the national market. The Nepal Tea and Coffee Development Board has embarked on preparations to establish a brand identity for Nepali tea. The board has invited designers to create and submit a logo for Nepali CTC tea with the proposed slogan ‘Nepal Tea-Premium CTC,’ signaling a concerted effort to bolster the presence of Nepali tea in the global market. As the fiscal year progresses, stakeholders in the Nepali tea industry are keenly watching how these initiatives will impact the trajectory of tea exports in the coming months.