Tea Association of India Expresses Concern Over Declining Auction Prices and Production Challenges in North India

NEW DELHI — The Tea Association of India (TAI) has expressed serious concern over declining auction prices in the north Indian tea industry, warning that the current market conditions pose a risk to business sustainability. The warning comes as planters face a combination of plummeting prices and production hurdles during the current cropping season.

According to the TAI, auction prices for north Indian tea declined by up to 17 per cent between July and mid-August. This downward trend affected prominent auction centers in the region, including Kolkata, Guwahati, and Siliguri.

Data from the Calcutta Tea Traders Association (CTTA) indicates that the average CTC sale price dropped from ₹291.27 in Sale No. 26 to ₹238.77 in Sale No. 34, marking a decrease of ₹53 or 17 per cent in less than two months. Similarly, the Guwahati Tea Auction Centre (GTAC) recorded a fall in the average CTC sale price from ₹264.89 to ₹221.57, representing a decline of approximately 15 per cent over the same period. The Siliguri Tea Auction Committee (STAC) also registered an 8 per cent drop, with prices falling from ₹201.80 in Sale No. 27 to ₹182.30 in Sale No. 34.

TAI President Shailja Mehta stated that the price drop cannot be attributed to oversupply. Official Tea Board figures for the current cropping season up to June showed a marginal increase of about 16 million kg, or 5 per cent, in north India compared to the previous year. However, this trend has been disrupted by severe weather events.

The industry has faced substantial operational disruptions due to floods in Assam, excessive heat, and severe pest and disease infestations. Data from TAI member estates indicated an 8 per cent drop in crop production in July, with a similar decline expected for August. Industry estimates suggest an overall drop of around 8 million kg in north India by the end of August compared to last year. Production is expected to remain constrained in the coming months as submerged tea bushes in Assam recover slowly from recent floods.

The export market has also presented challenges. Official Tea Board data shows that exports lagged behind the previous year's figures by approximately 23 million kg, or 18 per cent, during the January-June period, following a record export of 285.53 million kg in 2025. The TAI noted that this decline is partly linked to recent geopolitical crises affecting international trade.

These market pressures coincide with rising input costs for tea estates in Assam and West Bengal, including higher wage expenses and increased outlays for bonus payments, compounding financial strains for producers in the region.

"The current situation in the north Indian tea industry highlights the heavy reliance traditional sectors have on both environmental stability and global trade conditions. When producers face simultaneous shocks—such as climate disruptions, falling auction prices, and rising labor costs—margins shrink rapidly. For businesses operating in traditional manufacturing and agriculture, maintaining strict cost controls and building supply chain resilience are crucial to absorbing these cyclical downturns without compromising long-term viability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes