Tea market heading for depression


21 July 1999


Tea market ‘heading for depression’


THE Economist Intelligence Unit (EIU) predicts two years in the doldrums for the global tea market because of high stocks and rising production.

The market is carrying a large surplus from 1998 which means international prices are likely to fall to $1.40/kg (89p/kg) in the first quarter of 2001, compared with $2.40/kg last year.

The EIU says prices will also fall across the soft commodities sector this year with recovery not expected until 2001.

Coffee stocks are expected to rise powered by a bumper harvest from Brazil which will overpower rising consumption.

The EIU says cocoa production is expanding at around twice the rate of consumption and prices are forecast to slip by 5% next and by a further 7.9% in 2001.

Sugar remains oversupplied although the EIU finds there has been some recovery in price.

  • Financial Times 21/07/99 page 36

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