Global tea markets are entering a second consecutive year of declining prices, raising fresh concerns for African exporters and millions of smallholder farmers who depend on tea as a critical source of income. While tea remains one of the world’s most traded agricultural commodities, a combination of oversupply, geopolitical tensions and weakening demand from key markets is reshaping the industry in 2026.
According to the World Bank’s latest Commodity Markets Outlook, global tea prices are projected to decline by a further 2% in 2026 after already falling 4% in 2025. The downward trend follows years of relatively stable prices and reflects growing supply pressures, particularly from Asia, alongside disruptions in traditional export markets caused by geopolitical instability.
Data compiled through the Trademap platform shows that global tea exports generated average annual revenues of approximately $8.1 billion between 2021 and 2025. African countries accounted for nearly 20% of that total, underlining the continent’s significant role in the global tea economy. However, the sector is increasingly exposed to international shocks that threaten export revenues and rural livelihoods.
The World Bank noted that global tea prices had already dropped by 8% quarter-on-quarter during the first quarter of 2026, mainly due to abundant supply from India. India’s expanding production has helped offset concerns over weather-related disruptions affecting tea-growing regions in Kenya and Uganda, keeping the global market well supplied despite climate-related production uncertainties in Africa.
While prices at Kenya’s Mombasa tea auction remained relatively supported due to demand for premium-quality teas and concerns over weather disruptions, other key global auctions experienced significant declines. Prices at India’s Kolkata auction reportedly fell by 22%, while Sri Lanka’s Colombo auction registered a 5% decline because of ample supply and weakening international demand.
Beyond supply dynamics, the tea sector is also grappling with the economic fallout from escalating geopolitical tensions in the Middle East. Analysts say the conflict involving the United States, Israel and Iran has disrupted tea trade flows since early 2026, creating logistical bottlenecks, financial uncertainty and weaker demand from Gulf and Iranian buyers.
Specialist agency Expana Markets reported in March that traders in both East Africa and South Asia were facing growing difficulties securing payments and confirming shipments as risk premiums increased across regional shipping and financial systems. Gulf buyers, traditionally among the largest importers of African black tea, have reportedly reduced purchases amid fears of supply chain disruptions and slowing domestic demand.
The impact has been particularly severe for Kenya, the world’s leading exporter of black tea and Africa’s dominant tea supplier. Kenya alone accounts for nearly 80% of Africa’s tea exports by both value and volume, making the country especially vulnerable to international market fluctuations.
George Omuga, Chief Executive of the East Africa Tea Trade Association, which manages the Mombasa Tea Auction, warned earlier this year that cumulative losses linked to the Middle East conflict had reached nearly $8 million per week since March. According to Omuga, tea shipments destined for Gulf markets slowed considerably as buyers delayed orders and struggled with unsold inventories already in storage.
Middle Eastern countries account for between 20% and 25% of Kenya’s tea exports, making the region one of the country’s most important export destinations. In 2025 alone, Middle Eastern nations imported approximately $321.2 million worth of African tea.
As demand from the Gulf and Iran weakens, exporters are increasingly being forced to redirect tea shipments toward alternative markets in North Africa, Europe and Central Asia, often at lower prices. Industry analysts warn that such diversions could further intensify price competition in already saturated markets while increasing transport and logistics costs for exporters.
For African economies heavily dependent on tea exports, the implications extend beyond trade balances. Millions of smallholder farmers across Kenya, Uganda, Rwanda and Malawi rely on tea cultivation for household incomes and employment. Prolonged price declines risk reducing farm profitability, discouraging investment in tea production and worsening rural economic vulnerability at a time when climate shocks are already affecting agricultural systems across the continent.
At the same time, climate variability continues to pose long-term risks to tea production. Irregular rainfall patterns, prolonged droughts and changing temperatures are increasingly affecting yields and tea quality in East Africa’s major growing regions. Although favorable weather supported production in some areas this year, experts caution that climate-related disruptions remain a persistent structural threat to the sector.
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As International Tea Day highlights the importance of the global tea economy, the industry now faces mounting pressure from both geopolitical instability and shifting market dynamics. For African exporters, maintaining competitiveness may increasingly depend on market diversification, value addition, climate resilience investments and stronger regional trade integration capable of reducing exposure to external shocks.
The coming months will likely determine whether global tea markets stabilize or whether African producers face a prolonged period of falling prices and rising uncertainty in one of the continent’s most important agricultural export sectors.
