Price of tea soars

Thursday, 09 August 2012

The cost of a cuppa is set to increase by 15 per cent as the international price of tea soared to its highest level in two-and-a-half years.

Broken pekoe 1, or BP1 - the wholesale price of the highest quality black tea - has jumped by 41 per cent since the beginning of the year.

It has now risen to above 4 dollars a kilo.

The increase is due to a fall of the crop produced in Kenya, the world's largest exporter of black tea, because of adverse weather conditions.

Production of the tea there has been impacted by a drought at the beginning of the year and heavy frosts.

India and Sri Lanka - two other key tea exporters - have experienced a severe monsoon season, which has also reduced production prospects.

Kenya’s annual production is expected to fall by 17 million kilos compared to last year, with a 2012 crop of 360 million kilos.

A 41 per cent rise in wholesale prices could means an increase of around 15 per cent at supermarket check outs in the UK.

This would mean the cost of a pack of 80 teabags would leap from around £2.55 to around £2.95.

Kaison Chang, secretary of the intergovernmental group on tea at the UN Food and Agriculture Organisation, said: "Indications are that the price is going to go up pretty high."

He added that the price rise has also been fuelled by rising demand for tea in India and China, which are traditionally large exporters.

"The consumption level in China and India has been growing pretty rapidly over the last five years or so and that has contributed significantly to the increase in prices."

Russia, the UK, Pakistan and the Middle East - the biggest importers of tea - have stocked up in recent months.