Last year, Chinese Ambassador to Nepal Chen Song invited Nepal to export more good-quality tea to China and looked forward to conducting more tea-related exchanges to deepen the friendship between the two countries.

This year, in the first eight months of the financial year, the export of Nepali orthodox tea to China jumped 88.31 percent to Rs10.53 million. The country exported 5 tonnes of orthodox tea.

Insiders say that the amount may be small but it signifies that China has opened Nepali tea to its market. It’s good news for Nepali tea producers, who until now have been relying on the Indian market. As per official statistics, nearly 98 percent of the tea produced in Nepal is exported to India.

“In recent years, Nepal's tea has increased its presence in the Chinese market, and China has offered zero-tariff treatment on 98 percent of taxable products of Nepal, with tea included,” the ambassador said.

Tea producers say Chinese traders have been visiting Nepal in droves to buy Nepali tea.

The Nepali tea producers are diversifying the tea market, said Deepak Khanal, director of the National Tea and Coffee Development Board. Orthodox tea is exported to Tibet, China, via the Kerung border point.

Khanal added that the export of orthodox tea to China is currently under the initiative of the private sector. “The government is negotiating with the Chinese government to buy Nepali orthodox tea in bulk.”

Half a dozen Chinese buyers have arrived in Nepal and are visiting tea gardens in Ilam. “We are expecting deals with Chinese buyers,” Khanal said.

Recently, there was another group of Chinese buyers. “We have been informed that another big group of 25-30 Chinese buyers is also scheduled to come soon,” he added.

Diversification of tea will benefit both tea farmers and producers in Nepal as they will get a premium price for the premium product.

Orthodox tea refers to loose-leaf tea produced using traditional methods, which involve plucking, withering, rolling, fermentation and drying. Crush, tear, and curl (CTC) is a method of processing black tea in which tea leaves are passed through a series of cylindrical rollers with serrated blades that crush, tear, and curl the tea into small, even-shaped pellets.

Nepali traders say that tea leaves produced in Nepal, particularly in the hills, were sold to factories in Darjeeling, which they process and sell under the brand “Darjeeling Tea”.

Demand for Nepali tea has been rising as the bushes in Darjeeling have aged. Therefore, the Nepali tea leaves were a valuable input for the factories in and around Darjeeling, they said.

For years, Indian buyers have been alleging that Nepal’s tea is substandard and, as a result, offering lower prices. Nepali tea is often stopped at different border points under various pretexts.

“It is good news that the private sector is expanding and exploring new markets for both orthodox and CTC teas,” Khanal said.

Orthodox tea is exported to Australia, Bulgaria, Canada, Czech Republic, Italy, Japan, Netherlands, the UK, the US, Austria, France, Germany, Hong Kong, Hungary, India, Lithuania, Russia and Taiwan.

After India, Germany is the largest market for Nepali orthodox tea. Nepal exported 22 tonnes of tea worth Rs60 million in the first eight months of the current fiscal year. The Czech Republic bought 13 tonnes of orthodox tea worth Rs24.95 million.

The market for Nepali CTC tea is also gradually being expanded to other countries.

The CTC tea has been exported to Australia, Belgium, Canada, Denmark, France, Germany, Italy, Japan, Netherlands, Pakistan, Russia, the UK and the US.

After India, Russia became the second largest market for Nepali CTC tea as Nepal exported 159 tonnes of the variety worth Rs89.52 million in the review period.

The country exported 34 tonnes of CTC to Germany worth Rs53.46 million, 18 tonnes worth Rs19.91 million to the US, 13 tonnes worth Rs10.74 million to Japan and 13 tonnes worth Rs3.40 million to Pakistan.

Nepali tea, according to traders, is in big demand globally apart from India, but sanitary and phytosanitary (SPS) measures pose a barrier to export.

Importing countries have been expressing concerns over pesticide residue in the tea traded from India and Nepal, according to a South Asia Watch on Trade, Economics and Environment report.

The tea board has conducted research on the potential new international markets for Nepali tea and has identified nine of them. “The board, through the Ministry of Foreign Affairs, requested the embassies of those countries to facilitate the export of tea,” Khanal said.

In September 2020, Nepal's orthodox tea got its trademark, 157 years after the country started growing it. The trademark includes the words 'Nepal Tea Quality from the Himalayas'. It was launched two years ago and formally executed on September 22, 2020. It was the first brand of agricultural produce in the country.

Now, the tea regulating body is set to issue the certificate to CTC tea. “The preparation to provide a trademark on CTC tea has reached the final phase,” Khanal said.

The tea exports declined by 11.82 percent in the first eight months of the current fiscal year compared to the same period last fiscal year, customs data show.

Nepal exported 9, 823 tonnes of tea—both orthodox and CTC—worth Rs2.46 billion during the review period.