Tea Shortage To Send Cost Of A Cuppa Soaring

3rd Sep 2009

The price of a cup of tea could be about to rise as a worldwide shortage sends wholesale prices up.

Since 1999 the price of tea has barely risen because of oversupply.  Dry weather in Kenya, India and Sri Lanka has hit crops leaving supplies short. Production in some areas is down 15%.

"All in all we reckon we are about 80,000 to 90,000 tons of tea short in the world tea market now," said Bill Gorman from the UK Tea Council. 

And with demand growing as supplies fall, the cost of leaf tea at auction is being pushed up.  At one sale in Kenya last month prices for the highest quality tea were said to have risen by more than a third.

In this country, the retail price for the nation's favourite has already increased by more than 10% this year.

"Where a box of 80 tea bags in the UK only rose about 10p from 1999 to 2009 because of over-supply of tea, now that oversupply has gone we are starting to see those prices rising again," said Mr Gorman.

Tea is one of the key items which attracts shoppers into supermarkets and the big stores are giving money-off deals and buy-one-get-one-free offers to make up for the rises.  But not all retailers will be able to follow suit and it is not expected to be long before higher prices filter through.  The only thing that could stop the cost going up would be a much needed rainfall.

Source: Emma Birchley, Sky News reporter 03.09.09