High wholesale tea prices are set to continue, the United Nations’ main food body has warned, as supply becomes more aligned with demand.

The UN Food & Agriculture Organisation said this morning that early forecasts indicated “continuing firm prices for tea”.

Demand for black tea, which accounts for most of world production, has exceeded supply since 2009, the body’s Intergovernmental Group on Tea reported at its biennial meeting in Colombo, Sri Lanka. Tea prices averaged $2.85 per kg in 2011, the Group reported.

World tea production increased by 4.2%, to 4.1 million tonnes in 2010, the last full year for which figures are available, but consumption increased by 5.6%, to four million tonnes for the same period.

There was an improvement in the fundamental oversupply situation seen in recent years, with supply and demand coming into greater balance at prices higher than over the last decade, the group said. “But that trend will not continue if growers over-react to current firm prices,” it warned.