Tea prices to rise on strong demand and weak output, McLeod says
McLeod Russel, the world's biggest tea grower, expects tea prices to rise in the coming years due to sustained growth in demand and weak output levels. The company, which owns 38,000 hectares of tea plantations in India, Vietnam and Uganda, is expected to announce strong revenue and profit growth because of a "pipeline deficit" in global tea supply, as global black tea consumption is projected to rise 21% in the next 10 years. Kenya, Sri Lanka and India have already reported lower outputs this year due to adverse weather conditions and the situation is not likely to improve given that tea plantation area around the world remains the same, while demand continues to rise. Companies like Unilever and Tata Global Beverages are expected to be negatively affected by these commodity price rises.