Drought pushes up tea prices

Wan July 2, 2009, 3:26 pm

Tea lovers may soon have to pay more for their daily brew because shortages have caused wholesale prices to jump by as much as a quarter.

In Sri Lanka, one of the worst-affected producer nations, severe droughts meant that growers harvested less than half their normal yield for the first three months of this year.

Sri Lankan tea has rocketed 25 per cent in price on the international market and Kenyan tea is 21 per cent more expensive than last year. The United Nations said heatwaves and late spring rains had hit this year's harvest, potentially pushing up customer prices as retailers struggle to stay in profit.

Kate Goldie, managing director of Leaf Tea Merchants which runs two tearooms in Perth, said yesterday she might have to add a dollar to the price of a box of loose-leaf English breakfast tea, usually priced at $7 for 100g.

She said prices had been on an upward trend but she had been reluctant to pass the rises on to customers. "If you start charging people $4 or $5 for a cup of tea they're not going to like it," she said.

Instead, she may have to drop some of her range of teas, which come from countries as far afield as Egypt, Germany and Japan, because spiralling costs would make some varieties too unprofitable.

"It just makes you have a look and see whether it is worth stocking that product," Ms Goldie said. "If you can't make it profitable then you don't stock it."

She said the weak Australian dollar had made the problem even worse for local tea retailers. "The price jumps about for different kinds of tea - there are good seasons and bad seasons," she said. "But the general trend is upward."

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