Floods and Heat Push North India's Tea Industry into Crisis

Floods and heat are pushing North India’s tea industry into a difficult phase as falling auction prices collide with production challenges and rising operating costs.

The Tea Association of India (TAI) has raised concerns over the sector’s sustainability, particularly in Assam and West Bengal.

Auction prices fell by as much as 17 per cent from July to mid-August. At the same time, floods, excessive heat and severe pest and disease infestations have disrupted tea production.

The pressure also extends to exports, which have lagged last year’s levels during the first half of 2026. Rising input costs and higher wage expenses are adding further pressure on tea producers across Assam and West Bengal.

Auction Prices Fall Across Major Tea Centres

The sharpest decline came from the Calcutta Tea Traders Association (CTTA). Average CTC tea prices fell from 291.27 per kg in Sale No. 26 to 238.77 per kg in Sale No. 34. That represents a 17 per cent decline within less than two months.

The Guwahati Tea Auction Centre (GTAC) also recorded significant pressure. Average CTC prices fell from 264.89 per kg to 221.57 per kg, marking a decline of around 15 per cent. At the Siliguri Tea Auction Centre (STAC), prices dropped from 201.80 per kg in Sale No. 27 to 182.30 per kg in Sale No. 34. The decline stood at around 8 per cent.

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Floods and Heat Disrupt Tea Production

The tea industry faces difficult production despite a modest increase earlier in the season. Tea Board data showed a rise of around 16 million kg, or 5 per cent, in North Indian tea production through June compared with last year.

The trend changed sharply after that. Data from TAI member estates showed an 8 per cent production decline in July. The association expects a similar decline in August.

The combination of floods in Assam, excessive heat and severe pest and disease infestations has disrupted production across the region. The TAI estimates that North India could record an overall production decline of around 8 million kg by the end of August compared with last year. Assam could face further losses in the coming months. Floodwaters submerged tea bushes, and affected plants will need time to recover.

Price Pressure Comes Despite Limited Supply Growth

TAI president Shailja Mehta said the falling tea auction prices do not reflect an oversupply situation. North Indian supplies increased only around 5 per cent through June. Production then began to decline because of weather and pest-related disruptions.

This creates a difficult operating environment for tea producers. Prices continue to weaken while essential input costs rise. Wage expenses have also increased. Higher bonus payments add further pressure on estates. The situation has created growing concerns about the financial sustainability of tea plantations in Assam and West Bengal.

Export Weakness Adds to Industry Pressure

India’s tea exports have also struggled in 2026. The country recorded a record 285.53 million kg of tea exports in 2025. However, January-June 2026 exports lagged the previous year by around 23 million kg, or 18 per cent.

The TAI linked the weaker export environment partly to recent geopolitical disruptions. Lower export volumes add another layer of pressure for producers already dealing with falling auction prices and higher costs.

For North India’s tea industry, the combination of climate-related production losses, weak auction prices, rising costs and slower exports creates a challenging outlook for the months ahead.