Indian tea continues to struggle

The Indian tea industry is battling a tough season in 2025, grappling with multiple challenges – from production shortfalls and falling auction prices to a surge in imports that’s hurting domestic producers.

While production figures for the first half of 2025 show a rebound from the dismal 2024 levels, they still fall short of 2023, raising deep concerns about the industry’s sustainability.

All-India tea production dropped by nearly 8 per cent in 2024 due to erratic weather and pest attacks. Although there has been a recovery of around 25.76 per cent between January and May this year, much of that growth is relative to last year’s poor crop.

West Bengal and Assam – the two major tea-producing states – registered 44 per cent and 14 per cent growth respectively over 2024. However, the recovery has been modest for big growers, with production stilldown by 12.89 per cent in West Bengal and 8.65 per cent in Assam when compared to 2023 levels.

Darjeeling tea, globally renowned for its distinctive flavour,remains a serious concern. Its production in 2025 lags 10.34per cent behind 2024 and 18.24 per cent behind 2023.Worsening matters, the June–July 2025 period witnessed

severe climatic stress. A 2°C rise in temperatures andreduced rainfall led to 20–25 per cent crop losses across keytea regions, with July expected to record a further 15–20 percent decline.

This supply stress has not translated into better prices. Between April and July 2025, CTC leaf and dustauction prices fell by nearly 7 per cent in Assam and 9.5 per cent in the Dooars/Terai regions. The situationhas been aggravated by a massive surge in imports – up by 82 per cent in 2024, with Kenya and Nepal

accounting for 74 per cent of the total. The influx of lower-priced teas continues in 2025, depressing pricerealizations and pressuring Indian producers.

On the export front, India shipped 85.77 million kg of tea from January to April 2025, a marginal dip of 0.22per cent compared to last year. While North India posted gains, South India saw a sharp fall in volumes.

The industry stands at a critical juncture, and unless urgent steps are taken to address climate impacts,price instability, and unchecked imports, the future of Indian tea remains uncertain.

Source: The Statesman (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka 

Tea and EU’s pesticide logistics

The European Union’s increasingly strict pesticide regulations are reshaping the rules for imported tea. As more active substances are banned for agricultural use within the EU, maximum residue levels (MRLs) for those same substances in imported foods are being lowered – often to the limit of detection (LOD). This logic aims to ensure consumer protection but creates challenges for producers and traders outside the EU.

Tea production encompasses a wide range of traditional techniques, many of which involve high heat. Pan-fried green teas and smoked black teas, such as Lapsang Souchong, rely on thermal treatments essential to their sensory profile. However, these methods can also lead to the formation or accumulation of chemical residues that are not the result of pesticide use.

Two substances in particular – anthraquinone and polycyclic aromatic hydrocarbons (PAHs) – have become focal points in regulatory discussions. According to recent studies, anthraquinone can be introduced into tea through atmospheric deposition or combustion-related contamination during processing. Meanwhile, PAHs are formed during smoking or when organic material is exposed to incomplete combustion. Both should be considered process-related contaminants.

While the EU regulatory framework does distinguish between contaminants and pesticide residues, there are recurring cases where the classification of specific substances does not align with production realities. This disconnect can lead to disproportionate compliance burdens and unintended barriers to marketaccess – particularly for traditionally processed teas.

The legal framework governing chemical residues in tea within the EU is split between two core regulatory paths. This distinction determines not only the applicable limits but also the flexibility of enforcement. 

Anthraquinone, although its use as a pesticide was banned in the EU in 2008, and its MRLs were subsequently tightened, it continues to be regulated as a pesticide residue.  This classification persists even when the compound is demonstrably not applied agriculturally.For tea producers and importers, this rigidity creates compliance hurdles.

By contrast, when process-related contaminants are misclassified as pesticide residues, the consequences can be severe. Even trace amounts may lead to non-compliance, and for traditionally produced teas, this can result in de facto import bans.

Source: STiR Coffee & Tea (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Taiwan launched first AI tea production line

Taiwan's launched its first AI-integrated black tea production line. The initiative helps address labor shortages and the aging workforce. With the AI driven production line, manpower requirements can be reduced by two-thirds, or even to a fully unmanned

operation. The daily processing capacity for tea leaves has increased from four to eight tons.

The production line also features automated equipment for tea leaf storage and transport, rolling, loosening, fermentation, and drying. Heat is generated during the transportation of tea leaves from the plantation to the processing facility. If the process takes too long, the leaves can overheat and redden, leading to lower tea quality.

To address this, a transport and storage system with air-blowing channels toprovide cool air during transit has been designed. A shade net is also installed above the system to help maintain tea leafquality.

AI can intelligently manage the tea production process, including monitoring tea leaf color, equipmentoperation, and sensing humidity, temperature, and weight. The technology helps reduceerrors caused by manual operation and enhances tea quality.

The AI system can also automatically archive production data and upload it to a cloudbasedmanagement platform, enabling managers to monitor production progress in real-time.

Taiwan exported nearly 7,000 tons of tea to theUS, valued at approximately NT $706 million (US $22 million),accounting for nearly 30% of total tea exports. Black tea and greentea made up the majority of these exports.

Source: Taiwan News (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Matcha shortage push prices up

Record temperatures in Japan have curbed matcha green tea production this year, straining supplies and driving prices to all-time highs amid booming global demand for the trendy beverage.

The Kyoto region, which accounts for about a quarter of Japan’s production of tencha— the stemmed leaves dried and ground into matcha — was hit by severe heat waves last summer during Japan’s hottest year on record, which led to weak yields in the recent April-May harvest.

Global demand for matcha has surged in recent years, driven by millennials and Gen Z buyers seeking healthier choices, with hip cafes globally offering matcha lattes, smoothies, and desserts.The finely ground tea is prized as an antioxidant and for higher caffeine content than other green teas.

Japan produced 5,336 tons of tencha in 2024, anearly 2.7-fold increase from 10 years earlier. Japan’s green tea exports, including matcha, rose 25 per cent by value to ¥36.4 billion (RM1 billion) in 2024,driven largely by growing demand for powdered teas such as matcha.

By volume, Japan’s green tea exports rose 16 per cent.Tencha prices have climbed to record highs, with a May auction in Kyoto fetching ¥8,235 per kg, a 170 percent increase from a year earlier and well above the previous record of ¥4,862 set in 2016.

Source: Malay mail (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka 

Assam tea production hits by drought

Assam is currently reeling under a prolonged dry spell that has severely impacted both tea cultivation across the state. The ongoing weather crisis has hit the tea industry particularly hard, with production in June alone dropping by 20 to 25% compared to the same period last year.

Due to the excessive heat and lack of rain, many tea leaveshave turned black and dried up, affecting even Assam’s premium varieties, which are globally renowned for

their flavour and quality. A notable rise in the population of green fly, a damaging pest, has also been reported. This level of weather-induced stress on tea crops hasn’t been witnessed in the last 30 years. Although the impact of climate change cannot be reverse overnight, adoptingalternative, climate-resilient practices is crucial.

On the export front, the recent conflict between Iranand Israel had briefly disrupted Assam’s tea exports. However, with the easing of tensions, exports to Iranhave resumed, offering some respite to the struggling industry.

Source: The Assam Tribune (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

KTDA opposes proposed 1% levy

The Kenya Tea Development Agency (KTDA) has opposed a proposed 1% levy on tea sales, warning thatthe move would further strain smallholder farmers.The levy, introduced under the Tea (Amendment) Bill, 2023, mandates farmers to remit one per cent oftheir tea earnings to the Kenya Revenue Authority (KRA).

The Kenyan tea industry supports over 650,000 smallholder farmers andmillions more across the value chain. It remains a top foreign exchangeearner for the country.KTDA emphasized its commitment to improving returns throughbetter governance, sustainable practices, and innovation.

This development follows the recent introduction of a 4% Sugar Development Levy imposed on millers and importers by the Ministry of Agriculture.

Source: Africa Business News (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka 

Climate Change Redraws Global Tea Map

Climate change will significantly redraw the contours of the global tea industry by mid-century. By 2050, more than half of the world’s top 20 tea-producing countries are projected to see notable declines in the availability of land highly suitable for tea cultivation.

Kenya, one of the leading exporters of black tea, could lose up to 26.2% of its optimal tea-growing zones, with average suitability dropping by as much as 39%.

India forecasts a slight decline of just over 2% in highly suitable areas, while others point to gains, particularly in higher altitudes, suggesting potential upslope shifts.

Sri Lanka, another major player, may see a 14% drop in optimal areas by 2050, worsening to nearly 30% by 2070.

Even China is not immune, with projections showing a 4.7% reduction in its top-tier tea-growing zones, which could intensify under more severe climate scenarios.

The potential loss ofprime land could directly affect farmer incomes, cropquality, and global tea availability — challenges thatdemand proactiveadaptation strategies.However, the shifting climate also presents newopportunities. Some countries are expected to benefitfrom altered growing conditions. Turkey, for instance, could see a dramatic 127-130% increase in

moderately suitable tea-growing land by 2050, particularly in elevated, cooler regions.

Other countriessuch as Iran, Rwanda, and Thailand are projected to gain between 11% and 27% in highly suitable teacultivation zones, potentially emerging as new tea-producing hubs. These areas offer investment possibilities, though they will require significant infrastructure development, policy support, and technicalcapacity building to fully realize their potential.

As the climate crisis accelerates, the future of tea will depend on how quickly and effectively the industry,across continents and supply chains, can respond. Without immediate, coordinated efforts, some of theworld’s most iconic tea landscapes may become unsuitable for cultivation within a generation.

Source: STiR Coffee & Tea (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Kenya tea crop down by 18% in 1Q 202

Kenya's tea production declined by 18.8 percent in the first quarter of 2025 due to unfavorable weather conditions. The country produced 136.91 million kilograms of tea during the period, down from 168.76 million kilograms in the same period in 2024. The drop was largely attributed to extremely hot and dry conditions, coupled with a delayed

onset of the long rain season, which typically runs from March to May.

Production for the whole year is projected at 580 million kilograms,

which will be lower compared to 594 million kilograms in 2024 but slightly higher than 570 million kilogramsin 2023.

Kenya's tea-growing regions are primarily located in the central and Rift

Valley areas, with the latter experiencing the most significant decline in

Output. Revenue from tea exports fell by 20 percent in the first quarter,totaling 46.07 billion shillings (about 361 million U.S. dollars).

Source: Tea Board of Kenya (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Green Tea Market hits $ 16 Billion in 2025

The globalgreen tea market just leapt by an astonishing USD 1 billion in growth year-over-year, reaching new heightsin 2025 to USD $16.01 billion and predicts a trajectory that shows no signs of slowing, with themarket expected to reach USD 29.2 billion by 2033, growing at a CAGR of 5.56% from 2025 to 2033.

It’s more than just health hype. Consumers are shifting from sugary beverages to functional, plant-basedhydration. Green tea, rich in catechins, L-theanine, and natural polyphenols, has emerged as the wellnessworlds’ quiet champion, touted for antioxidants properties, weight control support, and a connection to

longevity. And it is not just Western consumers driving demand. Asia’s premium tea segment is booming,with a surge in export interest from wellness brands, boutique retailers are looking for the next-generationbeverages.

With global demand surging, the competition for quality green tea is reaching an all-time high. The largestproducer of green tea globally is China, followed by Japan, Vietnam, Indonesia, and India are now in a raceto position themselves as the world’s top green tea origin in quality, and only a handful will make the cut.

Source: World Tea News (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Kenyan tea exports fell by 20% in 1Q 2025

Revenue from Kenya's tea exports fell by 20 percent in the first quarter (Q1) of 2025 due to lower shipment volumes. The country earned 46.07 billion Kenyan shillings (about 356 million U.S. dollars) between January and March, down from 446 million dollars in the same period last year.

Export volumes declined to 157,514 tons in the quarter, down from 169,830 tons a year earlier, a 7.3 percent drop attributed to reduced production following a prolonged dry spell.

Thethree months were characterized by unusually dry weather.This had a significant impact on tea production,mainly in February,with output falling by 21 percent in the east of the Rift and

18 .6percent in the west.

Kenya is seeking to expand its tea export markets beyond traditionaldestinations such as Pakistan, the United Kingdom, Russia, andChad

Source: The peninsula Qatar (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka