While prices for CTC tea have gone up at auctions due to a spike in demand and a shortage in global supply, retailers across the country went for a price hike earlier this month. According to industry estimates, prices at the retail level have increased by an average of R20 per kg, indicating stronger prices during the beginning of next year. However, some retailers have decided to not increase prices till March next year.

Market estimates for New Delhi show that Tata Global Beverages has increased prices for Tata Gold and Tata Premium by R8 per kg to R389 and R328, respectively, since December. Since April this year, Tata Global Beverages has increased prices of these two brands by around 12%.

Taj Mahal, a premium tea brand from Hindustan Unilever, has increased prices by R32 per kg in the New Delhi market and R28 per kg in the Mumbai market. Taj Mahal is being sold in the range of R420-440 per kg across states. Prices for Lipton Yellow Label remain at around R550 per kg across most states.

According to Kamal Baheti, CFO, McLeod Russel, the world?s largest tea producer, prices for Assam tea have increased by an average of R25-30 per kg. The average auction price of CTC tea is around R160 at present compared to R130 last year. ?Due to a shortage in the crop across the globe, tea prices have gone up at the auctions,? he said.

Meanwhile, Wagh Bakri Group has decided to not hike prices till April. Piyush Desai, its chairman, said, ?We have to see whether the tea available in the gardens is worthy of such high prices or not. We haven?t seen quality tea in the last two months mainly due to adverse weather conditions.?

?Normally, we respond to increase in prices at auctions. But we don?t see any scope of increasing prices till April next year,? Desai said. The group increased tea prices by an average of R20 per kg during April-November, 2012. Prices for its premium CTC brand Good Morning Tea have increased by R40 in the New Delhi market in the first eight months of the year.

?On an average, we have seen an increase of R25-30 per kg at auctions, and we expect auctions to open stronger next year,? Baheti said.