Gulf tea prices set to rise

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Unseasonal droughts and insufficient fertiliser application last year on the back of record high oil prices, have resulted in dramatic harvest cuts this year.

This has lead to a decrease in the availability of black tea in world markets and an increase in prices, as demand continues to steadily grow.

Tea sales as a whole have been seen to be relatively immune to the impacts of recession and in fact, tea demand is now beginning to benefit from its association with health and wellbeing – an increasingly important driver of consumption in many markets today.

"Due to drought in the three largest black tea-producing countries earlier this year, there has been a considerable loss in crop resulting in a shortage in supply," said Dubai Tea Trading Centre director Sanjay Sethi.

"In the first half of 2009, overall crop shortage in India, Sri Lanka and Kenya is estimated to be over 85 million kg, declining total output by 20 per cent compared to the same period last year.

"This constraint of supply has resulted in much higher tea prices. We believe that demand and prices of tea will remain buoyant in the months to come."

Indian tea production fell to 62,590 tonnes in April, down 22pc on the 80,042 tonnes produced in the same month last year.

According to the Tea Board of Kenya, the country’s tea production fell to 139,283 tonnes in the first half of this year, falling 11.5pc versus the same period last year.

The board reported that dry conditions in the East of the Rift Valley saw output in that area drop 35pc to 50,600 tonnes in the first half of this year, down from 77,358 tonnes in the same period last year.

 

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