The Financial Times’ Jack Farchy writes that the price of tea has surged 41 per cent this year to surpass $4 per kilo as drought conditions sweep over major tea producing countries.”Dry conditions, poor rains and frosts have hit tea production in Kenya, the largest exporter of black tea. A bad monsoon has reduced production prospects in India and Sri Lanka, two other major exporters.”
The last time prices were this high was in 2009, when wholesale broken pekoe 1 leaves costs hit a record $5.45.
Unlike coffee, tea does not trade in a futures exchange but via physical deals at weekly auctions in Mombasa, Kenya, Farchy notes.
Traders and analysts believe that prices may climb further this year as the production shortfalls squeeze the market, he says.
According to statistics from industry publication The Tea Drinker cited by StatisticBrain.com, the world has 2 billion tea drinkers.