Kochi, Kerala: Tea prices opened 2026 on a firm note, driven by strong demand from domestic and overseas buyers. Two auctions held in the city saw high enquiries across categories, with tight supply and weather-related production losses pushing prices steadily higher. 

The first auction of the year recorded near-total sales in CTC (crush, tear, curl) dust tea, with 99 per cent of the lots sold. Robust participation by Kerala-based traders as well as buyers from other states supported the market. Orthodox leaf tea also performed well, with 92 per cent sold in the first auction. Momentum continued into the second auction, where both CTC dust and orthodox leaf tea recorded sales of 96 per cent each, reflecting sustained buyer interest across segments.

CTC tea traded at an average of ₹183 per kg in overall sales, marking an increase of around ₹10 within a fortnight. Blenders bought 66 per cent of the total CTC volumes sold. Orthodox leaf tea traded at around ₹180 per kg, with overall prices rising by an average of ₹2 to ₹4.

Demand remains strong across markets. Over the past month alone, dust tea prices have surged by ₹30 to ₹50 per kg. Prices are rising by ₹5 to ₹10 every week, according to M K Ajith, President of Tea Buyers Association, Kochi.

Lower production is the key factor behind the price rise. Severe cold conditions have affected output, leading to a sharp fall in arrivals. The quantity of tea reaching auctions has dropped by around 20 per cent, with many producers reporting heavy losses. Market participants expect prices to rise further in the coming days if the current situation continues, as reduced availability tightens supply.

Production is expected to recover only if colder conditions ease and the region receives good rainfall, according to Kochi-based auctioneers Forbes, Ewart & Figgis.

Improved demand from overseas markets is being supported by the quality of Indian tea. Cold conditions have reduced arrivals in several markets across the country, keeping enquiry levels high in Kerala. Many companies are preparing to build up stocks.

However, concerns linked to the international situation persist. Iran remains a major buyer of orthodox tea, and exporters are wary about whether unrest in the country could impact shipments.