Tea to get costlier in the coming days

Prices of tea are expected to increase in the coming days given its fall in production and increase in consumption. Also prices are expected to go up due to the rise in input costs. As per tea retailers, the prices may see a hike of 8-10%.

Tea production in the country stood at 980 million kg in 2011-12, out of which 800 million kg were consumed domestically and 180 million kg were exported. However given the irregular rainfall and the warm weather in the eastern region, this year the production is expected to drop.

On an average the production of tea is growing by 3% whereas its demand has been growing by 5% leading to a demand supply deficit of 2%. Further the demand for tea has gone up due to the rise in disposal incomes in the rural areas. However the production of tea has been constant for the last three years.

It is also believed that a price rise is overdue for tea as its prices have not risen as per inflation levels. Prices in auction centers have already been hiked and it is a matter of time when they start reflecting in the retail prices.