Foreign Exchange Coffee and the Case of Nepali High Mountain Black Tea

Nepal is reshaping its tea industry through a National Export Strategy that promotes organic certification and traceability, with the aim of establishing "Nepal Tea Quality from the Himalayas" as a recognized brand. A 36-month sustainable export project launched in February carries a budget of 1.5 million US dollars, and the trademark registered in 2018 now has certified factory users.

Tea has a 157-year commercial history in Nepal and is the country's first branded agricultural product, developed partly to earn foreign exchange. The export push began with a 2001 strategy to improve fresh leaf quality, and last September certificates went to 12 of 42 applicant factories. For buyers of high-mountain black tea, origin and pricing logic are the key checks on value.

Nepal's tea industry is undergoing a profound transformation from cultivation to export. Through its National Export Strategy, the government is promoting organic certification and traceability systems, aiming to make "Nepal Tea Quality from the Himalayas" a globally recognized brand. This article reviews the commercialization history of Nepali tea, the expansion of growing regions, export data, and the market landscape for orthodox and CTC teas, while also examining the role of trademark certification in combating counterfeits and enhancing value. For enthusiasts seeking authentic high-mountain black tea, understanding the origins and pricing logic of Nepali tea is an important prerequisite for judging its quality and value for money. Front Street Coffee always keeps an eye on developments in niche origins around the world, bringing readers first-hand information.

Twenty years ago, the Nepali government began shifting its policy focus toward the tea industry, aiming both to alleviate poverty in rural areas and to open export channels and earn foreign exchange through sustainable production methods. Starting with the first national strategy to improve fresh leaf quality introduced in 2001, long-term investment gradually bore fruit, and overseas sales of Himalayan Nepali tea expanded accordingly. In February of this year, the government launched another thirty-six-month sustainable export promotion project with a budget of 1.5 million US dollars, designed to make traceability and organic cultivation the hallmarks of Nepali tea.

According to official documents, "the National Export Strategy (NES) regards voluntary organic certification as one of the core elements for Nepal's tea industry to succeed in the global market, and has established traceability mechanisms across all stages of production." The document also states: "Nepali tea demonstrates considerable potential in both domestic and international markets." Advocates of information disclosure argue that clearly publicizing the origin of Nepali tea helps boost global sales. Tea has a 157-year history of commercial cultivation in Nepal and is the country's first branded agricultural product. In 2018, the government officially registered the trademark "Nepal Tea Quality from the Himalayas."

Last September, Nepal issued certificates to 12 of the 42 factories that applied to use the trademark. The trademark can both guard against counterfeit products and prevent reputational damage, while also enhancing the added value of the tea. Nine of these 12 factories are located in Ilam, precisely where tea was first planted in 1863.

At the certificate presentation ceremony, Bishnu Kumar Bhattarai, Executive Director of the Nepal Tea and Coffee Development Board (NTCDB), said: "This is just the beginning. Other producers will soon receive certificates as long as they meet the standards." In February of this year, he told the Kathmandu Post: "This (traceability) project will accomplish the task of brand building by producing high-quality tea." He called on tea farmers to "do business with integrity and strive for success."

Rabin Rai, Secretary-General of the Central Tea Cooperative Association (CTCA), told the Washington Post that systematically recording details at every stage—cultivation, processing, transportation, wholesale transactions, packaging, and retail—will bring consumers favorable international recognition. He said CTCA is committed to "spreading awareness among cooperatives and entrepreneurs, and implementing traceability systems and organic certification."

Throughout Nepal's long tea history, almost all exported tea has been used as blending material, which has blurred the identity of its origin. Eighty percent of the country's tea is Assam variety grown in the Tarai (foothills), processed into CTC (crush, tear, curl) tea. In contrast, the Chinese bush variety (sinensis-sinensis), which grows slowly at high altitudes and has a shorter picking cycle, is made exclusively by hand, amounting to only 5 million kilograms. The higher-value "orthodox" tea is purchased by Germany, the United States, Canada, and Japan, accounting for 10 percent of total exports.

Building on its original 5 production areas, Nepal expanded cultivation to 13 districts, with total output reaching 25 million kilograms in 2019. These new production areas are mainly located in the west and are better suited to traditional processing methods. The NES took five years to gain momentum, but over the following decade the tea trade balance gradually improved, and employment grew to 70,000 people (equivalent to 30,000 full-time positions).

By 2015, Nepal's total tea exports reached 11 million kilograms, accounting for 2.68 percent of the country's total merchandise exports. Sales that year were close to 2 billion Nepali rupees (about 17 million US dollars), of which 88 percent of the tea was sold to India. As Nepal seeks more trading partners, the share of exports to India has fallen to 80 percent of total production. Last year Nepal produced 6,000 tons of orthodox tea and 19,000 tons of CTC tea. The Trade and Export Promotion Center reported sales of 2.78 billion Nepali rupees for the 2019-20 fiscal year, a 13 percent decline from 3.2 billion rupees in the previous harvest year.

The above content is compiled by CoffeeHunters, a coffee news website.