Cost of tea could increase due to Kenyan droughts

The price of a box of teabags could be set to rise by up to 40 per cent due to a tea shortage in Kenya, experts have warned.

Rising prices

More than half of Britain's tea is grown in Kenya, with 62,000 tonnes imported to the UK alone in 2017, according to Statista.

However, droughts in plantations zones in Kenya have caused damage to crops which, in turn, has impacted on harvest volumes, causing them to be 12 per cent smaller than predicted this year.

The drought has meant the price of ingredients could see a hike, with costs of Kenyan tea expected to rise by up to 20 per cent.

The knock-on effect could see global prices of tea rise by as much as 40 per cent.

The hike will mean the price of a box of 60 teabags that normally cost £2.60 could rise to £3.64, if retailers decide to pass on the full wholesale rise to shoppers.

The price hikes are predicted to affect tea in the UK over the next six months, according to market researcher Mintec.

Where does the UK import tea from?

Black tea is imported to the UK from all over the world, although the vast majority comes from Kenya.

This is how much tea was imported to the UK in 2017:

- Kenya - 62,222 tonnes

- India - 17,119 tonnes

- Malawi - 11,197 tonnes

- Netherlands - 4,429 tonnes

- Switzerland - 3,759 tonnes

- Tanzania - 3,668 tonnes

- Poland - 3,047 tonnes

- Rwanda - 2,076 tonnes

- Zimbabwe - 1,854 tonnes

- Indonesia - 1,617 tonnes

Meeting demand

As manufacturers don't rely on just one tea supplier, if prices rise in one country they can replace it with cheaper alternatives from elsewhere. However, other countries are now pushing up their prices as they know there is not enough stock to meet the current demand.

Supermarkets are able to set their own prices and could avoid an expensive price hike by splitting the cost across other products.

Anais Divanch, Mintec market analyst, said that while big retailer prices are likely to stay the same in the medium-term, if the drought continues as predicted shoppers could be faced with bigger costs.

She told The Sun, "It is likely that only if the demand level outstrips supply volume from exporting countries after 2019, the market could see consumer prices impacted on shelves.

"Also, April's weather conditions in Kenya might worse the harvest forecasts for 2019, as temperatures continued to increase compared to March, resulting in droughts in some crop regions.

"This also is expected to add further upward pressure on prices within the next months."

But tea manufacturers are reassuring customers they are prepared for any possible inflation in costs, with Taylors of Harrogate saying they have long-term contracts in place to ensure a "sustainable price is paid if the market drops below the cost of production".