Indian Tea Hit by Drought and Pandemic, Prices Expected to Rise
Besides commodities, prices of other goods also continue to climb. Under the double blow of severe drought weather and a worsening pandemic, India, as the world's second-largest tea producer, is facing the threat of declining output and stalled tea-picking operations, which may further push tea prices up.
Besides commodities, prices of other goods also continue to climb. Under the double blow of severe drought weather and a worsening pandemic, India, as the world's second-largest tea producer, is facing the threat of declining output and stalled tea-picking operations, which may further push tea prices up.
As the pandemic continues to intensify in India, foreign media reports indicate that while the Indian government is trying to prevent the pandemic from spreading to 800 tea-producing areas across the country, the Indian Tea Association says that at least 90 tea gardens in the important tea-producing region of Assam have reported confirmed cases, and there are many lockdown areas that have already been declared. Tea farmers warn that if the pandemic cannot be brought under control, it could hit the tea harvest season and drive up prices.
Assam and West Bengal are important producing areas for Darjeeling black tea, and both regions have reported surging COVID-19 case numbers. Experts say local elections held in these two regions a few days ago helped fuel the spread of the pandemic. Labor groups blame the sharp rise in confirmed cases on the cramped working conditions inside the tea gardens.
The decline in output caused Indian tea prices to rise to a record high last year, enabling Kenya and Sri Lanka to gain a competitive advantage in the tea export market. Mintec analyst Idoniboye said that the recent shocks suffered by India's tea-producing areas will give tea-producing countries such as Sri Lanka an opportunity to sell more tea to major tea-consuming countries such as Russia.
Severe drought is threatening tea growth in Assam and northeastern India. Tea trader Rhys said that North India's tea output in March was 47 million kg, which, although higher than last year, was still below the 60 million kg harvested in March 2019, the year before the pandemic broke out. According to Mintec, the tea auction price in Kolkata, India, in April was 287.5 rupees per kg, up more than 40% from a month earlier.