Floor price of tea leaves fixed for the first time

May 07, 2018

Biplav Bhattarai, The Kathmandu Post, 07 May 2018

Suryadaya Municipality fixed the floor price of tea leaves for the first time, boosting the spirits of farmers who are often disappointed by the price.


The minimum price set by the municipality for this season is Rs40 per kg. The municipality commands a big share of orthodox tea production in the district. The Tea and Coffee Development Board also helped the municipality to determine the floor price.

Although mills offer higher rate for farmers during the peak tea leaf picking period, the price normally starts to drop to as low as Rs20 per kg during the monsoon period. The floor price, however, will remain effective throughout the season this year. According to farmers, due to competition among tea mills, the price normally goes up to Rs100 per kg during the first harvest. It then gradually drops, they said.


Currently, farmers are being offered Rs25-30 per kg. Generally young tender leaves are plucked during the first harvest which is of better quality.


Normally, there are four flushes or seasons for Ilam tea. Better quality tea are harvested in the first two flushes. The first flush or spring flush starts in late March. “The objective of fixing the floor price is to ensure that farmers get reasonable price,” said Suryadaya Municipality Mayor Rana Bahadur Rai. “We will keep on monitoring whether mills have abided the rules.”


According to him, the municipality will issue a code of conduct to implement the pricing standard within the third week of May. Besides the rate, the municipality has also focused on improving the quality of tea.


Om Kafle, manager of Panchakanya Ilam Tea Producers, said that they have been paying farmers the price based on the sales price they get. “The market should also be analysed, not only production.” The Tea and Coffee Development Board said that the move is aimed at improving the farmer’s income. “If the standard is enforced, farmers will get reasonable price and will also improve their income,” said Indra Adhakari, regional manager of the board. Nearly 5,000 tonnes of orthodox tea produced in Ilam are sold in India.


Eastern Nepali districts exported tea worth around Rs2 billion to India in the first nine months of the current fiscal year through Mechi Customs Office. Eastern districts exported 3.5 million kg of orthodox tea worth Rs1.2 billion and 7.1 million kg of crush-tear-curl (CTC) tea worth Rs715.3 million in the nine-month period between mid-July and mid-April, show data of the customs office. This includes tea produced in Jhapa as well.