The oversupply in global tea markets is poised to negatively impact Indian tea prices and exports. Industry experts have cautioned that the excess tea stockpiled from the previous year is expected to exert downward pressure on prices and hinder export opportunities for Indian tea producers.
CK Dhanuka, chairman of Dhunseri Tea & Industries, emphasized the significance of this issue, stating, “The excess tea in the global markets that has been carried over from last year will impact the prices and exports of Indian tea.” The global tea market has been grappling with geopolitical tensions and the looming spectre of an economic recession throughout 2023, further exacerbating the situation.
According to industry executives, the world is currently burdened with an excess of 100 million kg of tea. This surplus is likely to dampen both the prices and exports of Indian tea in 2024. Notably, global tea production surged to nearly 6,500 million kg in 2023, up from 6,400 million kg in 2022, with Sri Lanka and Africa emerging as key contributors to this increase.
In the calendar year 2023, Indian tea exports totalled 227.91 million kg, marking a decline of 1.37% compared to the previous year. Furthermore, the unit price realization experienced a downturn of 3.5%, amounting to ₹265.58 per kg in 2023 as opposed to the preceding year. These figures underscore the challenges facing the Indian tea industry amidst the current global market dynamics.