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Trouble brewing: Tea prices set to rise 15%

Kiran Randhawa
02.09.09

Tea prices are to soar to record highs because of crop failures caused by droughts.

The cost of the leaf is expected to rise by up to 15 per cent next year, according to exporters.

Prices reached a record level at an auction in Kenya last month, with high quality tea increasing by 36 per cent from January to $3.97 (£2.45) per kilogram.

India-based plantation company McLeod Russel says droughts in India, Sri Lanka and Kenya, coupled with a strong demand for tea, has led to the surge in prices.

The company's chief financial officer, Kamal Beheti, said: "We can see another 10-15 per cent increase next year.

"Prices will remain near the current level for the next few months as the harvest peaks in India, but afterwards they are likely to firm up."

Although Kenyan weather forecasters predict strong rains from October,

Mr Beheti warned it was unlikely to bring the cost of tea down "because of the shortage created in 2009".

Tea production in Kenya, India and Sri Lanka fell by 10.5 per cent in the first half of this year compared with last year.

Reader views (2)

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Why not make the tea bags 15% smaller?

- Nobby Clark, Perth, the Scottish one

"High quality tea £2.45 per kilogram"?

If a kilogram of "high quality tea" costs £2.45 why does it currently cost at least £1.00 for a cup of tea which tastes like dish water in any cafe?

I will stick to coffee, thank you!

- Reuben Camara, Morecambe Compound, EUSSR


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