The piping hot tea may turn lukewarm for sellers if pricing trend in Africa is anything to go by.
Thanks to the rise in demand, prices of Assam tea, the highest-selling tea in the country, rose by around Rs 20 per kilogram on an average during the initial months of the current tea season beginning April over average price of Rs 170 seen last year, according to McLeod Russel, world's largest tea planter.
This is in line with what company's finance head Kamal Baheti had predicted to analysts in February, earlier reported by DNA Money.
That trend has been confirmed, McLeod Russel said on Wednesday post its earnings.
"Opening level for new season quality teas in India have opened around Rs 20 per kg higher as compared to opening level last year. Weather condition during first few months of the new season has been normal. Prices in India for the year are likely to improve substantially due to demand in global markets and improved economic activities particularly in the rural markets," McLeod Russel, which has all its domestic tea estates in Assam, told investors.
But the rise in demand may be offset by higher global supply.
The prices at Mombasa, one of the world's largest tea auction centres where Kenyan tea is sold, are under pressure.
Kenya, a major tea producer, was a key factor behind a good run in tea prices in India last year as there was a significant shrinkage of crop in the African nation.
That situation has reserved since January, data from Mombasa tea auction shows.
Average prices have dropped from a high of Kenyan shilling (Ksh) 270 reached in January to about Ksh 247 a week back.
The drop in prices has been triggered by excess production reaching Mombasa, more than what the auction process could handle.
"Tea production for the month of April 2018 was 44.57 million kg, against 31.45 million kg recorded during the corresponding month of 2017. The increase in production was largely attributed to the onset of the long rain season which was experienced both the East and West," Kenyan Tea Directorate has said in its latest report.
This is in contrast to the situation that prevailed in 2017.
"Black tea production during 2017 was at record level mainly because of increased production in India. However, Kenya suffered crop loss due to unfavorable weather conditions. Tea prices at Mombasa auction for African teas increased 20% as compared to 2016. Tea prices in India were also higher after stagnant to lower prices over last few years," McLeod Russel said.
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