Drought puts higher tea prices in the bag

A recycled teabag from yesterday's breakfast is not every one's cup of tea. But with the price of a British cuppa set to soar, many may sacrifice the perfect brew and resort to just that.

A staggering 185 million cups are drunk every day - more than the combined amount of coffee and soft-drink consumption.

But yesterday a United Nations food agency warned consumers that droughts in tea-producing countries will mean price increases. The Food and Agriculture Organisation in Rome said the dry weather in Sri Lanka and many African countries has caused a 37 per cent drop in production in the first quarter of this year.

With demand expected to remain stable, prices will inevitably rise, it said.

Tea broker Tony Kane, of Wilson Smithett, said: "If the cost of tea on the supermarket shelves was going to reflect the price increase of raw tea you'd be looking at a 20 to 25 per cent rise.

"But if there's going to be a whack-up in price then it won't be for a few months."

Britain imports 150,000 tons of tea a year to satisfy the 77 per cent of the population who drink it daily.

Twenty countries produce tea, although Britain imports more than half from Kenya alone.

But Sarah Ward, a Tea Council spokeswoman, said British companies would be prepared to go to other countries for supplies. She said: "In an average teabag there are 35 different blends of tea. The job of a blender is to maintain quality without compromising the price - it's quite an art.

"Tea companies will have anticipated the problem and looked elsewhere. They will be keeping an eye on China's and India's production."

Van Den Bergh Foods, which accounts for a fifth of the UK tea market, supplying companies such as Brooke Bond, said it was far too early in the year to evaluate how it would hit the consumer.

Spokesman Duncan Bogie said: "We are used to fluctuations in the raw materials - it's quite common. It will take some time to appraise the full implications of the droughts in Sri Lanka and Africa."

The announcement follows news of a rise in the cost of coffee. Extreme cold weather hit production in Brazil this year, forcing producers to relocate entire coffee plantations to warmer areas.

A frenzy of buying by speculators forced prices up to a 20-year high. Inevitably the consumer paid the price, with Nestle, for example, putting the price of its 100g jars of Gold Blend up by 17p to pounds 2.54.