Darjeeling Tea Sales Fails On The E-Platform

Electronic bidding for Darjeeling Tea was started in June this year, eight years after the government moved the sale of all other teas online. Almost 1,200 million kilograms of tea – which is almost half of India’s tea output – is being sold this way. But it seems that the sales of Darjeeling tea on the e-platform are not doing as well as predicted. Some traders are even saying that the prices of some varieties have dropped by up to a quarter from a year ago when they were sold through the traditional physical auction system.

“When the pan India e-auction was launched in June by the Tea Board for all types of teas, people thought that it will be good for the producers as it will encourage bidding wars and drive up prices. But in the case of Darjeeling tea such a thing did not happen as it is a very unique kind of tea and there is hardly any competition for it in the market,” SS Bagaria, Chairman, Darjeeling Tea Association (DTA) told Economic Times. “Therefore, price realisation for broken and fannings varieties, which are not as premium as first flush teas, has dropped.”

Apparently on the electronic bidding system, prices of the broken and fannings varieties, which make up half of the Darjeeling Tea output, have fallen 15 – 25% from the previous year, traders told Economic Times. Last year, the broken and fannings varieties were going for Rs. 300 – 500 per kg and this year, the prices have dropped to at least Rs. 70 – 80 per kg, according to the traders.

According to the DTA chairman, the first flush teas were affected in the beginning of the season due to a dry spell. First flush teas are mostly sold privately and fetch high prices. They hardly come to the auctions. Darjeeling produces about 8.5-9 million kg of teas annually at its 87 tea estates. Of this, 1.8-2 million kg is first flush. This year, first flush production is less by 20%.