A recent press release by the FAO shows that in 2009, prices for black tea reached record levels, peaking at US$3.18/kg in September 2009, compared to US$2.38/kg in 2008 (+33.6%). These high prices come after a four-year period when growth in consumption outpaced growth in production. While the economic downturn did little to dampen tea consumption, there are fears that these high prices could over-stimulate production and lead to a supply-and-demand imbalance, with prices falling back in 2010, on the back of recovery in production in areas adversely affected by weather events.
Source
FAO Media Centre, press release, 22 December 2009
http://www.fao.org/news/story/en/item/38315/icode/
With production growth being held back in India, much will depend on the patterns of production in other major tea producers, with ACP producers largely being price-takers in the tea market. The tea market, however, is highly differentiated, with considerable scope existing for single-origin or brand-differentiated teas. This is an area where ACP suppliers could usefully be assisted in developing proactive policies.