Major tea companies clock lower profits as prices fall, costs rise

Major tea companies clocked in lower profits in Q2FY22 compared to the year-ago period as they faced the twin challenges of a sharp drop in tea prices from last year’s record levels and a higher wage cost.

Last year, companies reported higher profits – even on lower volumes due to a widespread disruption caused by the Coronavirus (Covid-19) pandemic – as tea prices rallied. But as supply normalised from June, prices started dropping.

A report by ICRA said that tea prices remained strong in Q1FY22 and started sliding with the onset of the peak production months of the current year.