Global Tea Prices Simmer: Why Your Cuppa Could Cost More

Global tea prices have continued to climb throughout 2026. According to Trading Economics, the contract for difference (CFD) tracking the benchmark commodity price reached INR 234.94 per kilogram on 27 June 2026, equivalent to approximately Rp 44,168 per kg. This position marked a 3.04% increase from the previous day’s trading. Over the past month, tea prices have surged by 12.89%, and compared to the same period last year, the increase stands at 14.09%. Despite these gains, the current price remains below the all-time record of INR 262.91 per kg, which was recorded in September 2020. These daily and monthly increases have not altered the overall market picture. International institutions still forecast that tea prices will trend lower throughout the year due to high global supply levels. According to the World Bank’s Commodity Markets Outlook report from April 2026, the average tea price from the three main global auction centres fell in the second quarter of 2026 compared to the previous quarter. The three auctions, located in Mombasa, Kenya; Kolkata, India; and Colombo, Sri Lanka, serve as the primary benchmarks for international tea trade. Prices at the Mombasa auction fell by around 6% in May before the market recovered and stabilised. Meanwhile, prices in Kolkata and Colombo have continued to weaken over the past two months. This divergence is linked to supply conditions in each region. Tea production in South Asia has increased, keeping global supply ample. Northern India and Bangladesh recorded significant production increases during the current harvest season. This additional supply has offset concerns over unfavourable weather in some East African producing countries. With sufficient stockpiles available, buyers have room to delay large-scale purchases. This dynamic makes it difficult for price increases to be sustained in the long term, even if temporary strengthening occurs due to weather events or trading activity. Another factor weighing on the market comes from the consumption side. Demand from the Middle East and North Africa (MENA) region has not yet fully recovered. As this region is a major destination for global tea exports, the slowdown in purchasing is putting pressure on international prices. Based on these conditions, the World Bank projects that tea prices will fall by around 2% throughout 2026. This forecast continues a weakening trend after average prices corrected by approximately 4% in 2025. The market outlook is expected to improve in 2027 as global demand normalises. Rising consumption is anticipated to help absorb the current large supply, thereby reducing the downward pressure on prices. However, risks to the tea market remain. A primary concern stems from international trade routes through the Strait of Hormuz. If shipping disruptions persist longer than expected and extend beyond the third quarter of 2026, distribution flows to MENA countries could be hampered. Such a situation would slow import activity in the region and prolong weak demand. The impact would be particularly felt by East African producing countries, which rely heavily on the MENA region as a key export market. Given these conditions, the global tea market is expected to remain under pressure throughout 2026. The recent price increases are largely driven by short-term trading dynamics, while the fundamental direction is still determined by ample supply and a slow recovery in global demand.