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Kathmandu Thursday November 29, 2001 Marga 14, 2058.
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Sailing
rough for tea industry
Post Report
KATHMANDU, Nov 28
– The initial euphoria of Nepali tea entrepreneurs that had heightened after the
announcement of the Tea Policy late last year with aims to capitalise on the favourable
climatic conditions and expanding the industry is now on the wane.
And the reason for
such shift in the attitude of the tea entrepreneurs, especially those who produce high
quality orthodox tea, is the lack of implementation of the Policy even almost a year after
its announcement.
"The
announcement of the Policy had raised hopes for the accelerated growth of the industry.
However, so far, its implementation has been pitiful," says Dilli Baskota, General
Secretary of Himalayan Orthodox Tea Producers’ Association (HOTPA).
However, now it is
not just the implementation issue that is of concern to the tea entrepreneurs. High
quality tea producers are presently faced by a number of challenges that has become a
major obstacle for the growth of the industry.
First is the
dwindling price of tea in the international markets lately. Entrepreneurs say that the
price of specialty tea of the Himalayan region has gone down by almost 15-20 per cent
lately.
The slumping price
has affected not just the exporters but even the small farmers who sell tea leaves to
processors. "The price of leaves has gone down from around Rs 28 kg last year to
about Rs 22 presently," says Baskota.
While entrepreneurs
do not rule out the global downturn as one of the reasons behind the dwindling prices,
they say it is the increasing preference of foreign tea importers for Sri Lankan tea over
the famous Darjeeling tea.
Darjeeling tea is
beginning to lose its earlier credibility in the international markets, they claim. And
since a large chunk of the Nepali high quality tea go into the international markets under
the Darjeeling logo, the slump in the price for Nepali tea is but natural.
Nepal presently
produces about eight hundred thousand kilograms of high quality orthodox tea, over 95 per
cent of which is exported. However, a large part of it goes via India, which producers say
are blended with Darjeeling tea to enhance the latter’s flavour.
Not only processed
tea, Darjeeling producers even procure young tea leaves from Nepal. Darjeeling then
exports the processed tea to international markets under the famous Darjeeling logo. As
per estimates, over 60 per cent of the total Nepali tea produce goes to India.
"With younger
bushes and a pollution free area, the eastern part of Nepal produces the finest tea in the
world, better than that produced by the century old Darjeeling bushes," says Ashok
Murarka, Chairman of Illam Tea Producers Pvt Ltd.
"If Nepali tea
were no better, no buyer would have been satisfied. The only problem with the fast
expanding Nepali tea industry is its lack of recognition in the international
markets," he says.
However, Nepali tea
producers and Nepal Tea and Coffee Board jointly came up with a logo to represent Nepali
tea and got it registered recently. The logo is yet to be put to use so far.
One of the other
reasons that have pressed the tea entrepreneurs is the imposition of 20 per cent luxury
tax on the import of foreign tea by the Bengal government in India recently. The
imposition of the tax has adversely affected the Nepali tea exporters who faced a spate of
cancellation of orders lately.
Also, local tea
producers in West Bengal have not allowed Nepal a berth at the Kolkatta tea auctions,
despite the directives of the Tea Board of India to allow the same. This has also
negatively impacted Nepali tea industry.
In addition, Nepal
is yet to obtain membership of the German Tea Council, an utmost necessity to promote
Nepali tea in the international markets. Germany is the largest importer of Nepali tea.
The Tea Policy had
recognised tea industry as one of the potential areas where Nepali can excel. And it is
because of the suitable climatic conditions that tea in Nepal can grow up as a major
industry. However, a tea entrepreneur, Krishna Prasai, says, "If this is the state in
which the machinery works, the tea industry can never grow as envisioned by the Tea
Policy."
The government must take appropriate
steps to do away with the current crisis faced by the tea industry, says Prasai.
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