Tea Producing countries discuss falling tea prices

Tea-producing countries have proposed new regulations similar to those that dictate oil prices in the wake of low prices of the green leaf in the international market.


Leading tea producers in Africa, including Kenya, and Asia attribute the low prices to overproduction, which they insist should be controlled to ensure better returns and maintain quality. 


Due to increased large-scale production of tea, the amount produced in 2023 stood at 6.603 billion kilograms, while consumption stood at 6.233 billion kilograms. Tea shipments from Kenya, China and India increased, while deliveries from Sri Lanka (the second-largest exporter of black tea) declined.


The increasing impact of climate change is partly to blame for the declining tea quality as it is adversely affecting the tea sector globally.


The global tea industry is facing a demand and supply mismatch as production continues to outpace demand with demand in the traditional tea-consuming nations of Europe and Asia stagnating. 


Tea prices across all black tea auction centres have stagnated over the last few years as well. 


Conflicts in the Red Sea and the Gulf of Aden are also said to have exacerbated tea buying and export challenges due to increases in logistics costs and shipping disruption.


Source: Standard Media (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

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