Ratings firm ICRA on Wednesday said that the ongoing political unrest in Darjeeling is likely to have an adverse impact on tea exports from the region.
“Darjeeling is currently witnessing political unrest, which has led to suspension of operations at tea estates in the region, at a time for production of the second flush tea”, ICRA has said in its report.
This particular variety of Darjeeling tea has historically been of very high quality and are almost entirely exported.
ICRA believes that the impact of the current situation on revenue is estimated to be in the region of ₹ 100 crore to₹150 crore at present. However, a prolonged political unrest might result in a greater impact.
Darjeeling typically has five flushes throughout the year. The second flush, from late May/early June to early July, produces a very premium quality of tea and fetches high realisations in the export markets, according to the report.
Such tea typically contributes to around 20—25% of the total tea produced in Darjeeling, but the revenue contribution is much higher, given its premium nature, it said.
However, the impact of the loss of export volumes for Darjeeling tea on the domestic supply—demand situation is expected to be limited as domestic demand is low, the report said.