The Mintec Global Tea Index plummeted in July 2019, losing 3% m-o-m and down by 11% compared to July 2018.
The tea prices decrease is mainly attributed to improved production in Sri Lanka in May 2019 up by 5% compared to May the previous year. The output at 34.1 million kg is the highest monthly production recorded since May 2012, mainly driven by higher yields during the recent months. Exported volumes from Sri Lanka mirrored the improved production, increasing by 7% y-o-y for the January-May period driven by fairly substantial demand from Iraq, Turkey and Iran. Auction Sri Lankan tea prices plummeted in July 2019, decreasing by 8% m-o-m and by 17% y-o-y.
Kenyan tea prices also added further pressure on the Mintec Global Tea Index, decreasing by 8% m-o-m. Prices of tea in Mombasa auctions suffered from slow demand from main Kenyan tea importers, Pakistan, UK and UAE, due to uncertainties of their political and economic situation. Reduced trading activities counterbalanced the upward pressure resulting from a lower production this year in Kenya.
In India, tea prices are relatively at the same price level in comparison to July 2018, as higher output, increasing by 5% for the January-May period, relieved the concerns on extreme weather conditions likely to affect the tea crop yields.