The cost of Indian tea could soon rise significantly. The main reasons for this prediction are increased cost of fertilizers and increment in the wages of workers on the plantations of Indian tea. Today, tea retains its prices at a minimum bar for the last couple of years. Indian tea retains second place in the ranks of countries based on production and export of tea worldwide. Major importers are seriously concerned about the possible rise in the prices of tea from India, as suggested by the various news agencies.
Experts point out that it may not be very easy to avoid an increase in prices on export of tea from India. Inflation is growing at a super-fast pace, making it necessary to raise the wages of workers. The fall in prices has been mainly because of the strong growth in supply in the face of sluggish demand. In addition, this year is notable for the lowest prices for tea ever.

The international market of tea does not revolve around one international price but corresponds to the different auction prices in producing countries. The entire market is therefore hazier and complex. However, the local pricing of each grade of each factory’s produce means that the prices of tea are more accountable to producers.
Not so long ago the Stock Exchange in Bangladesh surprised the whole tea market with a record decline in the prices of tea by about 47 units compared to the prices of tea during the first part of this year. Tea that is produced in Kenya has always been known for its excellent quality.

However, high production costs did not prevent the fall in prices there. For example, Kenyan tea prices declined by nearly three dollars per kilogram, something that the world had not seen for three years. The reason for this significant fall in the prices of tea is the steady decline in the demand for tea from the Middle Eastern countries. Major buyers of tea in the Middle Eastern nations want a very different type of product from what commands demand in Europe. The UAE prefers to buy low grown Sri Lankan tea, which does not have any demand in the UK. Pakistan and Egypt, for example enjoy Indian tea exports, but the volume of imports in the first eight months of this year decreased by about twelve percent. The same can be said of Britain. Recently, the producers of tea increased the yield by 5.8%, and totaled to about 618.6 million (kg).

There exists a dissonance between supply and demand and this is precisely what can cause the upcoming rise in the prices of tea.