Why Tea Prices are Increasing During Lock-down
An outbreak of coronavirus disease 2019 (COVID‐19) occurred in Wuhan and it has rapidly spread to almost all parts of the world. By the meantime, due to lock downs in almost all parts of the world, people have started to enjoy their favourite cuppa more than ever before while staying at home. Limited supplies just as millions in lock-down drive up demand for tea known for her immunity-boosting properties. Tea is also emerging as a preferred selection for many given its low caffeine content and other health benefits.
As Live Mint had reported, China, India, Kenya, Sri Lanka (Ceylon) and Vietnam – account for 82% of world tea exports, but due to restrictions on movement to contain the COVID 19 pandemic have already disrupted the key harvesting season, delayed some shipments by about a month and triggered a spike in prices.
Limited number of pluckers combined with colder temperatures last month are expected to decline the output in China this year. This resulted limited spring seasonal specialty tea supplies from China to North America & Europe.
In Kenya, the world’s No 1 exporter, which has seen minimal interruption to the crop since March and, according to International Tea Committee (ITC), may see their harvest increase by 15% in 2020.
The Indian Tea Board and Tea Association have forecast that loss in tea production in India due to the lock down could be more than 100 million kg, about 80 million kg in the North India and more than 25 million in the South. India produces about 1200 million kg of tea annually and out of which 15-20 % is orthodox tea. The (ITC) estimates India’s 2020 exports will fall 7%. In March, exports from India slumped 34%.
Plantations in Darjeeling had difficulties to harvest the first flush crop, since Indian government ordered its people indoors until May 3 (complete lock-down). According to Mr. Kaushik Basu, secretary of the Darjeeling Tea Association, Production from the second flush is set to drop more than 10%, and later flushes will not compensate for those losses. The first flush generally commences in March, while the second flush begins in May. So this situation is in deed a bad time for those who were looking forward to sip fragrant, flavourful Darjeeling first flush.
According to Mr. Nazrana Ahmed, chairman of Assam Tea Planters Association (ATPA), Limited transport facilities amid travel restrictions is also delaying tea movement to auctions and ports.
As tea garden owner Mr. Rajib Barooah said, Less labour also means more bush overgrowth, which will hit later crop potential. But this may also create difficulties when it come to plucking due to increased bush height.
At a recent Assam auction, buyers paid a third more than the previous auction.
In Sri Lanka (Ceylon), tea out put declined nearly a quarter due to an earlier drought, and the virus is now affecting exports, said Mr. Jayampathy Molligoda, chairman of the Sri Lanka Tea Board.
As RAVI LADDUWAHETTY reported to Daily News, Chairman of the Tea Exporters Association (TEA) Mr. Sanjaya Herath predicted that the increased prices on Ceylon Tea will remain till around June 2020 until India resumes tea production domestically.
The strong demand for Ceylon Tea from Iran can be expected until India fully resumes their exports. Once the Indian exporters start shipping tea to Iran under the special trading arrangements, Sri Lanka will witness decline in Iran business. An issue faced by the Ceylon Tea exporters is their inability to travel abroad to promote Ceylon Tea. Meanwhile, the COVID 19 has brought mixed results for tea growing nations as some are facing losses in tea crop due to lock down situation while origins like Sri Lanka have witnessed price hikes at the tea auction.
Tea production in Vietnam is also expected to be largely unaffected, but the impact on world tea output from Vietnam is relatively lower.
Turkey, the world’s No 1 tea consumer per capita, is usually self-sufficient in production but faces its own labour shortage. This has also created some extra demand for foreign teas. Turkish producers say that they usually rely on migrant workers from countries like Georgia and Azerbaijan, but that this year they will have to use relatively inexperienced locals which may cut supplies.
As Orimi trade, Russia’s leading tea manufacturer mentioned “Shipments from India have been delayed by an average of one month, and we have also experienced delays in the supply of tea from other countries, in particular Sri Lanka”.
“Demand for tea is higher than it was … tea in Russia has an image of a thing that, combined with lemon, boosts the immunity system,” mentioned Mr. Ramaz Chanturiya.
Prices for raw tea, which Russia imports, jumped as much as 30% from pre-lock-down levels.
Considering the sustainability of tea industry, this is a sad situation. There should be a balance in both demand and supply. Due to prevailing situation / lock-down, most of the people are staying at home & of course they enjoy their favourite cuppa. Also there is a belief that black tea can lower the effect of COVID 19. But it’s not proven so far.
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References
- Main Source: https://www.livemint.com/news/india/why-tea-prices-are-rising-during-lockdown-11588139236227.html
- International Tea Committee: https://inttea.com/
- Assam Tea Planter’s Association: http://www.atpa.in/
- Sri Lanka Tea Board: http://www.srilankateaboard.lk/
