A bitter brew as rising costs stir tea market

Erratic rainfall results in production loss of 76.73 million kg

- ISHITA AYAN DUTT & SHARLEEN D'SOUZA

Adverse weather conditions have driven up bulk tea prices, prompting major packet tea companies, including Tata Consumer Products and Hindustan Unilever (HUL), to implement gradual price increases. Further hikes are expected.

During the 2024-25 second-quarter earnings call, Sunil D'Souza, managing director and chief executive officer of Tata Consumer, informed analysts that erratic weather patterns had impacted tea and salt production, leading to input cost inflation. "We will start passing this on to consumer prices," he said.

Staggered price increases have already been introduced in tea, though not all cost increases have been passed on.

During the after-results conference call, Ritesh Tiwari, chief financial officer of HUL said, "We now have a deterministic signal that this season is inflationary. In the same quarter or the one before, we weren't sure, as early data was still coming in. But now, well into the commodity tea season, we know it's inflationary due to lower production."