Know the reason and current situation

Recently, a sharp decline has been seen in the prices of tea. Tea prices have fallen by 8% in the last one week, reaching below Rs 184 per kg. At the same time, a decline of up to 15% has been recorded in the prices of tea in a month. This decline is a result of increased supply in the domestic market and decline in tea exports due to geopolitical problems.

Current situation on tea prices

Performance of the last one week and month:

• Fall in 1 week: 8% drop in tea prices.
• Fall in 1 month: Tea prices fell by 15%.
• However, from January 2024 till now, a jump of 21% has been seen in the prices of tea.
• 1 Year Performance: Tea prices have registered a rise of 15% in the last 1 year.

due to decline

1. Geopolitical Problems:

• Tea exports have been affected due to the Middle East crisis.
• The decline in exports increased supply in the domestic market, putting pressure on prices.

2. Decline in Domestic Consumption:

• There is a possibility of decline in domestic consumption.
• Change in consumption patterns is a matter of serious concern for the industry.

3. Effect of Nepal Tea:

• Tea imported from Nepal has increased competition in the Indian tea market.

Production and market scenario

Major areas of tea production:

Tea is produced in India mainly in Assam, West Bengal, and north-eastern states. Apart from this, tea is also cultivated on a large scale in the southern part of the country.

• Position in the world: China ranks first in tea production, while India ranks second.

Statement from TAI President Sandeep Singhania:

• He said that even after November 30 this year, the ban on plucking of tea leaves continued.
• Decline in production till December: Tea production is estimated to be 120 million kg less by the end of December.
• Unsatisfactory level of prices:
  • The upper price of premium tea is Rs 300 per kg, which is below industry expectations.
  • There has been a decline of 20-25% in the prices of tea in the last 2 months.

Future challenges and indications

1. Imbalance of production and consumption:
   • Production figures may either be inaccurate or domestic consumption may have declined. Both situations are serious challenges for the industry.
2. Impact of Middle East Crisis:
   • The impact of geopolitical tension may remain on exports for a long time.