Impact of Covid-19 on The Global Tea Industry

The aromatic beverage prepared by pouring boiling water over cured tea leaves, not only brings a sense of calmness, fulfilment, and refreshment in the tea drinker’s life but also enables several health benefits daily. It has been brought to us by several countries famous for their major tea plantation and cultivation. Currently, the top 4 tea producing nations are India, China, Kenya, and Srilanka. The coronavirus outbreak across the world has brought most of the industries at a standstill, and the tea industry is one of the worst-hit in the above countries.

India– With the current scenario prevailing, Indian tea exports may fall 6-8% this year. Estimates from the Tea Board have suggested that because of the loss of the Darjeeling First Flush, which should have been harvested from March to May, there could be a shortfall of 16-20 million kg in export volumes this year, which might cause a trade deficit of $64 million($6.4 Crores). Above all, if the production and quality of the Second Flush (beginning in May) are affected, the export shortfall may exacerbate. Since the significant tea export destinations are USA, U.K., Japan, and Iran who are struggling to eradicate the virus, which is taking a toll on their economies, demand for tea will lessen as a discretionary spend, which shall impact the Indian exports further. It has also been a real struggle for daily wage earners of several tea estates. “Our experience regarding wages in tea gardens has not been good. Unless the State government intervenes, there can be no certainty about our wages, which in the industry has always been much below survival level,” said Binay Karketta, a tea garden union leader based in Alipurduar, West Bengal. The daily wages of the tea garden workers in these areas are INR 176, and the continuation of these distressing times might lead to hunger and starvation in the far-flung tea gardens.

China– Spring tea production in most parts of China, barring the Hubei area, appears to have taken off. Tea workers are being screened for fever, instructed to maintain a safe distance during plucking, and also made to follow additional measures to maintain strict hygiene during the processing. Yet, the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-products (CFNA) was forced to postpone three tea conferences scheduled for March, and several tea fairs, including the spring edition of the Global Tea Fair. During the crisis, overall retail sales are being stripped off $144 billion per week, according to China’s Evergrande Think Tank.

Kenya– According to a Mintec analyst, Kenya and other Africa tea-producing region are facing significant disruption in the passage of tea from plantations to the ports and beyond. Kenya last week entered its own 21-day partial lockdown, including the port city Mombasa, a large tea shipping hub. The East Africa Tea Trade Association that runs the famous Mombasa tea auction had postponed the planned auction of regional teas indefinitely, sending the entire industry into chaos. It has suspended 600,000 small scale farmers and employees of factories across regions with an order of not processing tea leaves unless those destined for the alternative market rather than the Mombasa auction.

Srilanka– Most of the tea sales in this country have recently been digitized. As the curfew declared on March 20th made it impossible to hold physical tea auctions, an e-auction platform developed by a local software company CIRCA Solutions, amassed a register of 300 buyers and eight tea brokers for its first e-auction on April 4th. Over 16.5 million kg of tea was sold at Sri Lanka’s first three e-auctions between April 4-19th, allowing the country’s tea export industry worth $1.5 billion to continue functioning during a nationwide curfew imposed to contain the pandemic.

The tea industry is labour dependent. With the strict continuity in lockdown, plucking, and processing of the tea leaves have been hampered. In India, with the loss of the second flush, the tea industry will sink into unimaginative darkness, and this shall also laterally affect the farmers with meagre daily wages. But with proper precautions and hygiene measures if the processing is re-started along with the assurance of viral outbreak being contained at the earliest, exports and auctions could be resumed gradually, and the loss could be surely alleviated. The tea industry’s future is full of uncertainty. In essence, the export demand for tea may reduce since, at times of economic crisis, countries often cut down trading of non-essential goods, or there could be an increased demand for tea with the awareness of its immunity-boosting properties amidst a viral outbreak.

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