Fluctuating tea prices could prompt some suppliers to alter their blends - but picky Brits are likely to prevent any major changes to tea sold in UK stores.
Mintec says contrasting price movements in Kenya and India - key sources of tea typically sold in tea bags in the UK - may encourage some suppliers to change their sourcing tactics.
While Kenya enjoyed good supply in 2014, with record production levels of 445,000 tonnes, dry weather is causing concern this year. The average Mombasa auction price for the grades of tea typically used in tea bags - fannings and dust - has risen 24% from December to February following a prolonged dry spell that has prompted fears the development of the tea crop will be harmed. This is causing particular concern in the market at the present time.
“Yields are traditionally at their highest in February and March, and the dry weather has caused some to worry quality and quantity will be reduced,” says Mintec market analyst Aby Green, adding buyers will be waiting to see what effect the weather has had, and what movements filter through to the tea auctions of East Africa.
In contrast, prices in India have dropped, with dust-grade tea in Assam and Darjeeling down 13% on average from December to February. Favourable weather at the start of 2015 has contributed to good supply, while demand has been slightly weaker.
“Early indications point to 2015 being a good year for Indian tea following a 1% drop in production last year when heavy rains in the north damaged output,” says Green.
But tea experts suggest suppliers to the UK are unlikely to be tempted by the lower prices as Brits are so particular about the taste of their tea. “Consumers prefer the strength and briskness of Kenyan tea, which is synonymous with the British cuppa,” says one.