Dry Weather and Deadly Floods will Lead to Increase in Kenya’s and India’s Tea Prices

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Mumbai, India  Accoding to Reuters, tea prices are expected to increase this year due to dry weather putting a dent in production of the commodity in vital suppliers India and Kenya. Deadly flooding could also disturb tea transportation shipments to Sri Lanka, who are another crucial exporter in the tea industry.

It was reported that over the weekend 150 people were killed by flooding and landslides in Sri Lanka. The extremely dangerous weather has been expected to interfere with tea shipments.

Kenya and India both suffered drops in tea sales over the last year. Kenya’s dropped by over a third from a year ago after a drought withered away parts of the country, while manufacturing was down by over 16% during that period in India.

An increase in tea price will help support tea companies that are struggling with climate issues. According to Recruiter’s, companies such as India’s McLeod Russel, and Goodricke Group Ltd, as well as African producers like Kapchorua Tea Company Ltd and Williamson Tea Kenya Ltd will stand a chance in holding down their tea distributing companies.

Kamal Baheti, chief financial officer at McLeod Russel, stated and told Recruiter’s that “We are expecting prices to remain firm this year. Already globally prices are up 15 to 20 percent compared to the last year.”

Rohan Pethiyagoda, the chairman of Sri Lanka’s state-run Tea Board, stated “We will see a downturn in the amount (of tea) that will come to auction (in Sri Lanka).” Due to the flooding and landslides, roads are blocked in Sri Lanka’s, which means transportation of tea shipments will be heavily affected.

Since crops are already decreasing all over the world, A N Singh, managing director of Goodricke Group, a manufacturer based in the eastern Indian city of Kolkata, believes “It will keep prices firm throughout the year.”

According to Recruiter’s, Singh stated “India’s production in 2017 is likely to be 15 to 20 million kg lower than last year’s output of 1.24 billion kg despite rising consumption.”

Kenya and India believe that higher tea prices will help them stay afloat until they receive better weather conditions for their crops and transportation of crops and shipments. It is stated that India is likely to get normal monsoon rains in 2017, according to Recruiter’s.

Posted on WholeFoods Magazine Online, 6/1/2017

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