Darjeeling tea prices soar 15% in Europe this Year

KOLKATA: Darjeeling tea has commanded 15% higher rates in Europe this year despite the financial downturn in Europe as quality upgradation and marketing have boosted margins of the beverage that is widely regarded as the champagne of teas. The industry now hopes to take another leap with plans to join hands with European Trade Commission (ETC) to launch a marketing and generic promotion campaign in EU next year for making a further penetration in the region. Nearly 60%-70 % of Darjeeling's total production of 9 million kg is exported, mainly to Germany, the UK and Japan. "This year, the EU buyers have offered us 15% to 18% higher prices over 2011 because they are satisfied with the quality of our premium first and second flush teas. 

Demand has also gone up because of less adulteration," said Sanjay Bansal, chairman of Ambootia Group, a leading Darjeeling tea producer. Though 9 million kg was produced in Darjeeling, nearly 40 million kg was available in the global market with Darjeeling branding. The tea industry, along with Tea Board, fought over the years to have a GI (geographical indication) mark for Darjeeling tea to protect its identity in the world market. Teas that were sold at around 12.75 euros per kg last year have been able to command 15 euros this year. Some better qualities have garnered 30 euros per kg, said SS Bagaria, chairman of Darjeeling Tea Association . 

Even medium quality teas have been sold at 7-8 euros per kg compared to 5 euros previous year. Incidentally, the second flush teas have a unique muscatel flavour that lures the EU buyers. Moreover, this year's recession has seen big EU tea importers buy out small family-run companies who were into tea imports. "This restructuring of business in their homeland has helped us push more teas because it is easier to make business with big buyers," said Bansal. Even Harrods , the upmarket store in London , has picked up 10% more teas from Ambootia Group this year. "We are expecting that the price of Darjeeling teas will go up further in 2013.

 It's a boutique product and should not be treated as a commodity. The producers should sit together to work out a strategy to make further penetration in world markets. Interestingly , even the US has now started importing Darjeeling tea," said Ashok Lohia, chairman of Chamong Tee Ltd, the largest Darjeeling tea producer in the country. MGVK Bhanu, chairman of Tea Board of India, said: "We are working on a plan for generic promotion of Darjeeling tea with ETC. This will also involve marketing because we will try to create consumer awareness about Darjeeling tea. However, nothing has been finalised yet." The local prices of Darjeeling tea have gone up substantially. 

( Source - The Economic Times)