Gorkhaland stir costs Darjeeling tea estates Rs250 crore so far
The Darjeeling unrest to carve Gorkhaland out of West Bengal came at the peak of the plucking season, resulting in Rs250 crore loss to 87 tea estates
Kolkata: Some 75,000 tea workers in Darjeeling are set to lose at least Rs10,000-12,000 each in wages, docked because they failed to turn up for plucking after the Gorkha Janmukti Morcha (GJM) announced an indefinite strike on 15 June.
The disruption—to demand a separate state of Gorkhaland —came at the peak of the plucking season, when estates hire thousands of temporary workers, and “surprisingly nobody is grudging about the loss of daily wages,” said Binod Mohan, chairman of Darjeeling Tea Association.
That shows a kind of hardening never seen before among the local people, added Mohan, who owns five estates in the district.
The collective loss of revenue for the 87 tea estates in Darjeeling has been estimated at Rs250 crore so far, according to Mohan. But the actual loss is going to be much higher, and can only be determined when the blockade ends and planters start to clean up their gardens, he added.
Auction volume is running thin, and “the goodwill that the hallowed brew from Darjeeling has built for itself over the past 150 years has taken an unprecedented beating”, said Krishan Katyal, chairman of J. Thomas and Co., the world’s largest tea broker and consultancy.
A little over 19,000kgs of Darjeeling tea have been catalogued to be sold through the next two auctions—sale 32 (due next week) and sale 33 (due the week after)—according to the Calcutta Tea Traders Association (CTTA).
But only around 16 packets, or 300kg, have been offered for auction through sale 34. The quantity is too small for an auction to be held, said J. Kalyan Sundaram, secretary general, CTTA. Sale 34 may have to be cancelled, but even if it goes through, it may well be the last auction of the Darjeeling crop in 2017.
The crop that is still being despatched was produced before plucking was halted in early-mid June—it typically takes a little over a month for the crop to reach the auction centres.
There is no end in sight to the impasse, and if it carries on for another month, there may be no further production in Darjeeling this year, said J. Thomas’ Katyal. The overgrown bushes would need “skiffing”, which in planter-parlance means removal of the top layer from the bushes. This process alone will take at least a month to get the bushes to be productive again, according to Katyal. So if the strike draws on for a month or so more, it may be impossible to restore the gardens before winter sets in, he added.
As the strike disrupted supplies, average prices at auctions started to shoot up. In the last auction, sale 31, the average price rose 27.5% to Rs458.38 a kg over the last year, but only around 20,000kg were sold—compared with 130,000kg a year ago, according to CTTA.
This year’s unprecedented disruption could deal a killer blow to several growers in Darjeeling because the premium second flush crop was lost, according to Ashok Lohia, chairman, Chamong Tee Exports (P) Ltd.
“In Darjeeling, what you produce till 31 July determines if you recover your costs,” Lohia said, “because the rest of the year you anyhow struggle to cover costs.”
The supply disruption will force exporters and sellers of packet tea to source the crop from other regions, said Arun Singh, managing director and chief executive of the Goodricke group. Blends will take over, and that will have long-term implications for Darjeeling tea, he added.
- Sushma Swaraj holds trade talks with Luxembourg PM Xavier Bettel
- Indonesia calls for stronger trade links
- Govt issues draft cross-border insolvency norms, seeks public comments
- CBI asked to conclude Saradha, Narada probes
- Buoyant stock market, real estate made Indian HNIs wealth grow fastest in 2017: report
Editor's Picks »
- With fall of the last dove, MPC minutes portend more than one RBI rate hike
- RITES IPO ticks the valuations box, but not the growth one
- Is Reliance Jio really India’s most profitable telecom firm?
- How US-China trade war will affect India
- Dear ICICI Bank board, giving a red card to Chanda Kochhar is not enough