Tea Production and Exports Decline as Looper Caterpillar Infestation Hits Plantations

Nepal’s tea production and exports have declined this season due to a widespread infestation of looper caterpillars, which has severely damaged tea bushes across major producing districts, particularly Jhapa.

Parbat Dangi, a tea farmer from Haldibari Rural Municipality in Jhapa, said the pest outbreak struck his plantation during the peak plucking season. Despite using pesticides he had relied on in the past, the infestation could not be controlled.

“There were more than 500 caterpillars on a single plant. Continuous rainfall reduced the effectiveness of pesticides,” Dangi said, adding that the pest appeared far more resistant than during a similar outbreak seven years ago.

Dangi said looper caterpillars destroyed tea buds and tender leaves across his 10 bighas of land, cutting green leaf production from an expected 120,000 kg to just 80,000 kg this season. Around 40,000 kg of tea leaves were lost to the infestation.

The impact has been felt across the district. At Parakhushi Small Farmers’ Cooperative, which includes around 60 small tea growers, including Dangi, green leaf collection has declined by nearly 100,000 kg this season. The cooperative usually collects about 600,000 kg of green leaves annually to produce CTC tea, but collection has fallen to around 500,000 kg this year.

According to the Trade and Export Promotion Centre, tea exports declined by nearly 30 percent in the first five months of the current fiscal year (FY 2025/26). Both export volume and value have dropped. A study published by Nepal Rastra Bank last year showed that nearly 90 percent of Nepal’s tea is exported to India.

Nepal Tea Producers’ Association Vice President Shiva Kumar Gupta said looper caterpillars have destroyed between 25 and 30 percent of tea production nationwide. Although the exact extent of damage will be ascertained by mid-March, current conditions suggest a significant decline in green leaf output, he said.

Gupta noted that Nepal’s tea exports to India have not faced formal restrictions, but farmers have suffered losses because the pest has become resistant to commonly used pesticides. He added that untimely rainfall and delayed response from concerned authorities worsened the situation.

He also said the Indian Tea and Coffee Board has decided to conduct sample testing from every vehicle carrying tea in the upcoming season, although procedures and modalities have yet to be clarified.

Nepal Tea Producers’ Association General Secretary Shukra Dahal said both production and exports have declined due to the pest outbreak and market conditions. He added that dealers in India offered between INR 85 and 90 per kg for tea this season, prompting many Nepali farmers to stock tea for domestic sales instead of exporting to India.

He added that pest control costs have surged sharply. “Earlier, pesticides costing Rs 5,000 were sufficient. This season, even after spending Rs 55,000, the pests could not be controlled,” he said.

Acting Director of the Tea and Coffee Development Board Indra Adhikari said looper caterpillars destroyed about 25 percent of green tea leaves nationwide. He attributed the decline in CTC tea exports to lower prices in the Indian market compared to last year and better prices available domestically, encouraging traders to stock tea for local sales.

“Last year, CTC tea sold for around INR 180 per kg in India. This year, prices fell below INR 100 per kg, prompting producers to hold stock for the domestic market,” Adhikari said.

According to Mechi Customs Office, Kakarbhitta, Nepal exported tea worth Rs 3.17 billion, amounting to 13.47 million kg, in FY 2023/24. In FY 2024/25, tea exports rose to Rs 4.21 billion, with export volume reaching 15.42 million kg—an increase of 32.5 percent year-on-year.

However, exports have declined in the current fiscal year. In the first five months of FY 2024/25, tea worth Rs 2.70 billion (12.70 million kg) was exported through the Mechi customs point. In the same period of FY 2025/26, exports fell to Rs 1.86 billion, with volume dropping to 6.56 million kg—a decline of 31.4 percent.

Customs Officer Ramchandra Dhungana said stricter and slower laboratory testing by Indian authorities has also contributed to the decline in exports. He added that labour shortages during the plucking season have forced farmers to leave some tea unharvested, further reducing production.

About 90 percent of Nepal’s CTC tea is exported to India, while orthodox tea is shipped to India, Europe, the United States, China and over two dozen other countries. Mechi Customs Office said Nepali tea exports remain uninterrupted, with no formal restrictions imposed.

Around 90 percent of Nepal’s tea production is exported, generating approximately Rs 380 million in foreign exchange earnings annually. According to the National Tea and Coffee Development Board, tea is cultivated on about 27,500 hectares across the country. Nepal has 68 large tea industries, 930 orthodox tea processing units, 38 CTC factories and more than 150 small-scale orthodox processors in operation.