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Tea Prices: Specialty Up, Commodity Down | World Tea News

Rising labor expense and unpredictable weather are driving prices higher, according to economists.

Tea sold at auction in Colombo, Sri Lanka, continues to lead the world in pricing, averaging $420.90 per metric ton ($4.21 per kilo) for high-grown, according to the International Tea Committee. African teas sold in Mombasa averaged $2.39 with Malawi tea bringing $1.68 at the Limbe auction. Tea auctioned in Jakarta averaged $1.73 per kilo.

The World Bank forecasts an average auction price of $2.80 per kilo in 2017, rising to $2.81 in 2018, $2.83 in 2019 and $2.84 in 2020. In 2017, the global cost of agricultural raw materials (fertilizer etc.) is expected to rise 4 percent.

China Benchmarks

Pricing is much more favorable for growers in China where tea is not auctioned. A cold spring and intermittent rains caused prices to increase on lower volume this year and the cost of employing skilled pluckers is up.

According to a report in Sixth Tone “Five hundred grams of West Lake Long Jing tea, picked during the mid-March first harvest in eastern China’s Zhejiang province, wholesaled at between 1,800 and 2,500 yuan ($260 to $360) this year. After it is repackaged and sold to consumers, West Lake Long Jing will retail domestically at between $870 and $1,150 (6,000 and 8,000) yuan per 500 grams.”

“Even though there was a very early flush, the returning cold pushed harvests as late as two weeks,” explains Austin Hodge, founder of Tucson-based Seven Cups Fine Chinese Teas. “Our Bi Luo Chun producer let one third of his tea go unpicked because he was not willing to pay the price, just out of stubbornness, not economics.”

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Tea Prices: Specialty Up, Commodity Down | World Tea News.