Tea Auctions and Small Tea Growers

How Indian tea is sold through auctions, why small growers now produce about half of India's tea, and how prices are set.

India is the world’s second-largest tea producer after China.

Auctions

Much Indian tea is sold through auctions in centres like Kolkata, Guwahati, Siliguri, Coonoor and Kochi.

Buyers taste samples and bid.
Auctions help with price discovery and quality grading.
E-auctions replaced traditional outcry auctions.

The rise of small growers

Small tea growers, with just a few hectares, now produce around half of India’s tea, up from very little a few decades ago.

They grow tea leaves and sell them to bought-leaf factories that process them.
Common in Assam, North Bengal and the Nilgiris.

Price problems

Small growers often receive low prices for green leaves.
Quality varies.
Tea prices at auctions have been stagnant in real terms while costs have risen.

Export vs domestic

Most Indian tea is consumed at home; India is one of the world’s largest tea-drinking nations.

The small grower

A farmer in Assam grows tea on two hectares and sells fresh leaves each morning to a nearby factory. Low leaf prices make it hard to cover labour costs.

Thinking big estates produce almost all tea

Small growers now produce around half of India's tea.

Key takeaways

India is the world's second-largest tea producer.
Tea is sold through auctions, now mostly electronic.
Small growers produce around half of India's tea.
Stagnant prices and rising costs squeeze producers.