Tea Prices Head North on Stronger Demand

Time of India

17 hours ago

HighlightsIndian tea prices surged by 18% in the first four months of this year, reaching an average wholesale price of ₹160.5 per kg, driven by strong demand from international markets such as Russia, Iran, Iraq, and the United Arab Emirates. The price of Assam orthodox tea has attained a record high of ₹314 per kg at auctions, with expectations for continued firm prices as the second flush teas commence auctions in June. Despite the rise in tea prices, packet tea companies like Hindustan Unilever and Tata Consumer Products are not planning to increase retail prices to avoid losing market share, although there may be marginal hikes if prices continue to escalate.
Indian tea prices
increased 18% in the first four months of this year from a year earlier, pushed up by strong demand from markets like Russia, Iran, Iraq and the UAE. With exports demand remaining robust and consumer goods firms such as
Hindustan Unilever
and
Tata Consumer Products
stepping up purchases for the local and international markets, auctioneers and industry executives expect the prices to stay firm and shipments to top last year's levels.
Companies that sell packet tea, however, aren't currently planning to pass on the higher price to local consumers as they don't want to risk losing market share, said industry executives.
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According to Tea Board figures, the average wholesale tea price in the January-April period rose to ₹160.5 per kg from ₹136.4 a year earlier. This average is for a mix of premium orthodox (hand-rolled) tea and the common CTC dust and leaf teas from South India, Assam and West Bengal.
International demand for Indian tea remains strong. 'There has been a significant rise in demand for Indian tea from the Middle East countries and Russia. They buy premium orthodox tea,' said Mohit Agarwal, director of Asian Tea, a Kolkata-based tea exporting firm. 'If this momentum continues, then the overall
tea exports
of the country will surpass last year's exports.'
The price of Assam orthodox tea has hit a record high of ₹314 per kg at auctions, Agarwal said. Prices are expected to remain firm even as the second flush teas will start coming to the auction centres in Guwahati and Kolkata from June second week, he said, adding: 'For the year 2025, we can expect record production and prices as the Middle East will continue to buy Indian teas.'
India exported about 255 million kg of tea worth ₹7,111 crore in 2024, when it moved up to the third position from the fourth on tea exports by replacing Sri Lanka. Exports from Assam and West Bengal totalled 154.81 million kg, valued at ₹4,833 crore. South India's share was 99.86 million kg worth ₹2,278 crore.
Production in the first four months of this year has also increased from a year ago period. Figures released by the Tea Board shows production at 203.14 million kg, up 28.94 million kg from the January-April period of last year.
'Even though all the packet tea players are buying heavily, there are no immediate plans to raise prices for the end consumers. If prices rise further, then there may be a marginal price hike for the consumers,' said Viren Shah, chairman of Gujarat-based Jivraj Tea. 'But these are early days, and nobody would like to lose their market share by increasing prices.'
J Kalyanasundaram, secretary of the Calcutta Tea Traders Association, said players like HUL and Tata Consumer Products stepped up purchase at the auctions, after the government made auction compulsory for 100% CTC dust teas. 'This has resulted in a price rise. Prices of this variety have shot up by ₹19-20 per kg,' he said.