Tea exports decline in first five months of 2023/24

Nepal’s tea exports witnessed a decline in the first five months of the fiscal year 2023/24.

Data released by the Department of Customs shows that Nepal exported 7,181 tons of tea valued at Rs 1.87bn over the five months of 2023/24, in contrast to 10,065 tons worth Rs 2.23bn during the same period in the previous fiscal year.

The decline in tea exports during this period is attributed to farmers holding onto their stock in anticipation of obtaining better prices, according to traders. Notably, exports of special tea varieties decreased in this period. Special tea varieties such as green tea, white tea, gold tea, and silver tea are known to command higher prices in the international market.

Although there is a high demand for Nepali tea in the international market, Nepali producers are facing challenges in sending their products abroad. Indian traders take advantage of this situation by purchasing Nepali tea and exporting it to international markets, say Nepali farmers.

Farmers claim that Indian traders offer them around Rs 550 per kg for tea but sell the same product to international buyers for as much as Rs 3,000 per kg.

Nepali farmers cultivate CTC (crush, tear, curl)  and orthodox varieties of tea. Tea farming is done across 20,237 hectares in 30 districts. Nepal has around 160 tea gardens and over 17,000 people are involved in tea farming. However, major production is concentrated in districts like Jhapa, Ilam, Panchthar, Terhathum and Dhankuta in eastern Nepal. Tea is also grown in districts such as Bhojpur, Khotang, Chitwan, Sindhuli, Parbat, Kavre, Gorkha, Dolakha, Lalitpur, Ramechhap, and Pyuthan, among others.

Nepal’s annual tea production capacity is approximately 26,300 tons. Of the total production, about 6,500 tons is orthodox tea, while green tea accounts for around 730 tons and the remaining is CTC tea.

Nepali tea is exported to various countries, including Australia, France, Canada, Denmark, China, Germany, Japan, Italy, the Netherlands, the United States, Poland, Sweden, Thailand, Taiwan, and India.

Meanwhile, the government has begun branding exercises in a bid to enhance competitiveness and access of Nepali tea in the national market. The Nepal Nepal Tea and Coffee Development Board has started preparation 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 slogan ‘Nepal Tea-Premium CTC’.