Price of premium tea rises as lack of rain damages crops

28 June 2013

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28 June 2013 | Adam Leach

Premium tea buyers are bracing themselves for a price spike after a lack of rain hit crop growth in India’s largest tea-producing state.

The Indian Tea Association (ITA) said production for May fell by 7 per cent compared with the same month last year in Assam, dropping from 18.4 million kg to 17.1 million kg. As a result of the production slump, prices of premium tea leaves are predicted to rise and companies with a focus on Assam tea will be hit particularly hard.

A N Singh, chairman of the ITA and managing director of Goodricke Group, said:There has been a significant crop loss in May mainly due to lack of rainfall and excess sunshine.Monsoon, which was supposed to come by middle of the month, was late and has just arrived. We have seen tea bushes getting damaged and turning red due to high temperatures.”

While prices of premium teas will rise, lower-to-medium class teas are expected to continue declining because of over supply. The average price of tea is expected to rise by 7-8 per cent over the course of 2013.

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