Trouble brewing for tea producers as coronavirus lockdown hits harvests

Trouble is brewing for the world’s tea producers as the coronavirus lockdown shut down the harvest in several important regions, including the picking of India’s “champagne of teas”.

Despite forecasts of increased demand from drinkers stuck at home across the world, producers have become frustrated by the enforced quarantining of their workforce, with India’s output expected to drop by 9% in 2020.

Lockdown measures in the north-eastern Indian state of Assam halted work for more than a month. The global coronavirus outbreak escalated at the worst possible time for Indian tea producers, just as the most valuable harvest of the year was ready to be plucked.

India has very specific production periods, experts said, called flushes. The prized first flush of Darjeeling, the “champagne of teas” harvested in the country’s north-eastern, has been severely hit. This harvest, which is generally picked between March and April, accounts for as much as 40% of annual revenue.

Other tea exporting countries, including China, Sri Lanka and Vietnam, have also experienced disruption, though Kenya – the main supplier of tea to the UK – has so far avoided major problems. The International Tea Committee has predicted the country may see output rise by 15% this year.

“Because of the weather, [Kenya] can produce tea all year round,” said Ibi Idoniboye, senior market analyst for Mintec.

Operations have also been affected in Sri Lanka, where tea production in the first quarter of the year declined to the lowest levels in decades. Exports have also suffered compared with the same period last year, falling 14.1 million kilograms to 59.5 million kilograms.

The country’s weekly tea auctions, a 125-year-old tradition, were held online for the first time in April to comply with social distancing measures. The auctions, usually held in Colombo, are among the biggest in the world and attract around 200 people.

“This [the pandemic] is the first time tea production was affected in a country wide level,” said Roshan Rajadurai of the Planters’ Association. Work stopped completely for a couple of days, he said, but the government allowed agricultural activities to resume again.

Hundreds of thousands of workers continue to work plucking the tea. Other areas of productions, for example packaging, are not operating at full capacity.

On top of the complications posed by the Covid-19 outbreak, tea producers have also faced an unprecedented drought, added Rajadurai.

Meanwhile, in Vietnam exports fell 2.5% in volume to 26,000 tonnes during the first quarter of 2020.

While there hasn’t been any disruption to supply of tea in the UK, it is likely that prices will continue to rise, driven by the disruption to operation and speculation over shortages, said Idoniboye. “I’d expect to see that tea will still be appreciating for the next few weeks but at some stage it will hit a ceiling,” he added.

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