A long dry season in the East has left Asia's premier tea-growing regions parched and could lead to a rise in tea prices, analysts said.
The drought across Sri Lanka in the first three months of 2014 has contributed to a 50 percent fall in tea production on previously corresponding period, industry sources said. Some 400,000 small tea holders in Ratnapura, Kalutara, Galle and Matara districts are among the worst affected, according to The Sri Lanka Tea Board.
"Sri Lanka is the second largest exporter of tea at 300 million tonnes," said Standard Chartered analyst Nirgunan Tiruchelvam. "In a context where tea prices have been falling – last year tea prices fell 40 percent which was the most precipitous fall in the history of the commodity – it's conceivable that tea prices are going to ascend in this context."