Tea: Cycles

The calmest price chart among tropical crops

The World Bank three-auction average was $2.85 per kg in September 2026, close to $2.94 a year earlier and $2.73 five years ago. The ten-year range is narrow, $2.13 to $3.37. In real 2010 dollars prices have drifted down, from $2.88 in 2010 to $2.51 in 2025. Tea lacks the dramatic booms of coffee or cocoa, because many producers and steady demand dampen shocks. Tilton & Guzmán use tea to argue that slow demand growth need not depress long-run prices; shifts in supply costs matter more.

Tea, avg 3 auctions price

Chart: Tea, avg 3 auctions monthly price

Chart: Tea, avg 3 auctions annual real price

Super-cycles in tea

Tea has had sharp short booms but no lasting super-cycle. The World Bank three-auction average (Kolkata, Colombo, Mombasa) was $1.03/kg in January 1960, $2.85/kg in September 2026 and a record $3.37/kg in August 2022, so in real terms prices have fallen a long way. Tilton and Guzman use tea to show that slow demand growth need not depress long-run prices; supply costs matter more, and tea's supply has grown steadily as Kenya and small growers in India and China expanded. Booms come from droughts in Kenya or Sri Lanka, policy shocks and disruptions in India, and fade within a year or two.

1. 1976-1977

   The beverage boom: Brazil's 1975 frost sent coffee to records and tea followed as consumers switched.

   World Bank three-auction average from $0.71/kg (November 1972) to $2.88/kg (April 1977)

2. 1983-1984

   Tight supply lifted auction prices to a record that stood for decades; prices then halved within two years.

   $3.07/kg (January 1984), down to $1.48/kg (March 1986); Kolkata $3.47/kg (January 1984)

3. 2007-2009

   Drought in Kenya in 2009 and firm import demand ended a long slump.

   $1.77/kg (March 2007) to $3.16/kg (September 2009)

4. 2020

   India's Covid lockdown in March-April 2020 stopped plucking during the first flush, cutting supply; Kolkata prices spiked.

   Kolkata from $1.30/kg (April 2020) to $4.07/kg (August 2020)

5. 2022

   Sri Lanka's economic crisis and its 2021 ban on chemical fertilisers cut Ceylon output; Colombo prices hit records.

   three-auction average record $3.37/kg (August 2022); Colombo $4.49/kg (September 2022)

6. 2024-2026

   Kenyan and Indian supply growth and a global surplus kept prices flat; Indian auction prices fell in 2025.

   three-auction average $2.85/kg in September 2026; India all-auction average Rs 188.03/kg in 2025, down Rs 11.27/kg (ITA)

What drives the cycle

• Weather in Kenya, Assam and Sri Lanka. Drought or excess rain changes plucking within weeks; Kenya's crop swings move Mombasa prices.
• Small-grower expansion. New smallholder area in India, Kenya and China adds supply that does not shrink when prices fall.
• Labour costs and estate economics. Wage rises raise estate costs; losses lead to estate closures in Assam and Bengal.
• Import demand from Pakistan, Middle East and Russia. Currency crises and sanctions in buying countries change auction demand.
• Policy shocks. Export bans, fertiliser rules and pesticide limits (India banned paraquat in 2026, per Tea Biz) change supply and compliance costs.

Metrics to track