Falling auction prices raise concern over sustainability of tea industry: TAI

The Tea Association of India (TAI) on Friday, August 28, expressed concern over the sharp decline in tea auction prices in north India in recent months, warning that the trend could pose a serious threat to the sustainability of the industry.

The planters’ body said the tea industry was facing a difficult cropping season due to floods in Assam, excessive heat and severe pest and disease infestations, which have affected production.

According to the TAI, auction prices declined by up to 17% from July to mid-August, even as supplies increased marginally by 5% compared with last year. The association expects production to decline further in the coming months.

“The auction price figures of north Indian tea industry recently reflect a precarious state of affairs in the industry, coupled with the onslaught of flash floods, excessive heat and severe pest and disease infestations hampering production of the crop during the current cropping season,” TAI president Shailja Mehta said in a statement.

“A grim reality is unfolding in Assam and West Bengal’s tea industry, where plummeting auction prices in the last five to six weeks have sparked widespread concern, putting the sustainability of the tea industry at grave risk,” she said.

The association said the three major tea auction centres in Kolkata, Guwahati and Siliguri recorded a significant decline in prices between July and mid-August.

At the Calcutta Tea Traders Association (CTTA), the average CTC tea price fell from Rs 291.27 in Sale No. 26 to Rs 238.77 in Sale No. 34, a decline of Rs 53, or 17%, in less than two months.

At the Guwahati Tea Auction Centre (GTAC), the average CTC price dropped from Rs 264.89 in Sale No. 26 to Rs 221.57 in Sale No. 34, a decline of around 15%.

The Siliguri Tea Auction Centre (STAC) also recorded a decline of around 8%, with prices falling from Rs 201.80 in Sale No. 27 to Rs 182.30 in Sale No. 34.

The TAI said the decline in prices could not be attributed to oversupply.

Tea Board data showed that north Indian tea production increased by around 16 million kg, or 5%, during the current cropping season up to June 2026 compared with the same period last year.

However, the trend was subsequently disrupted by severe floods in Assam, excessive heat and pest infestations in several tea-growing areas, the association said.

Data from TAI member estates indicated an 8% decline in crop production in July 2026, with a similar fall expected in August, Mehta said.

The combined impact is estimated to result in an overall decline of around 8 million kg in north Indian tea production by the end of August compared with last year. Production is expected to fall further in the coming months, particularly in Assam, as tea bushes submerged during the recent floods will require time to recover, she said.

The export scenario has also remained weak this year amid the recent geopolitical crisis, Mehta said.

While India’s tea exports reached a record 285.53 million kg in 2025, exports during January-June this year were around 23 million kg, or 18%, lower than the corresponding period last year, according to official Tea Board data.

The TAI expressed concern over the outlook for the tea industry in Assam and West Bengal, citing falling auction prices and rising input costs, including wages, as well as higher expenditure due to increased bonus payments.