Guwahati: Auction prices of North Indian tea have fallen sharply over the past five to six weeks, deepening a liquidity crisis in the tea industry in Assam and West Bengal, even as flash floods, excessive heat and severe pest and disease infestations continue to hit production this season.

A sale-to-sale analysis for financial year 2026-27 shows a sharp decline in average tea prices at the three major North Indian auction centres, Kolkata, Guwahati and Siliguri, between July and mid-August, from Sale 27 to Sale 34.

At the Calcutta Tea Traders’ Association (CTTA), Kolkata, the average CTC sale price fell from Rs 291.27 in Sale 26 to Rs 238.77 in Sale 34, a drop of Rs 53, or around 17 per cent, in less than two months.

At the Guwahati Tea Auction Centre (GTAC), the average CTC sale price declined from Rs 264.89 in Sale 26 to Rs 221.57 in Sale 34, a fall of around 15 per cent.

The Siliguri Tea Auction Committee (STAC) also recorded a decline, with the average price falling from Rs 201.80 in Sale 27 to Rs 182.30 in Sale 34, down around 8 per cent.

Tea Association of India (TAI) president Shailja Mehta said the sharp fall in prices could not be attributed to oversupply.

“However, this phenomenon cannot be attributed to an oversupply situation. While the production figures released by Tea Board of India during the current cropping season till June 2026 show a marginal increase in production of around 16 Mkgs, or 5%, for North India compared to last year, the trend has been disrupted due to severe floods in Assam, coupled with excessive heat and extreme pest infestation in the other tea-growing regions of North India,” he said.

Data received from TAI member tea estates indicates that the crop fell by around 8 per cent in July 2026, with a similar decline in the current month.

The association estimates that this will result in an overall shortfall of around 8 million kg in North India by the end of August compared with last year.

The crop is expected to decline further in the coming months, particularly in Assam, where tea bushes submerged by the recent floods will take time to recover.

The export picture is also a concern for the industry amid the recent geopolitical crisis.

The industry recorded a record 285.53 million kg of exports in 2025. However, Tea Board figures for January-June 2026 show exports lagging behind the corresponding period last year by around 23 million kg, or 18 per cent.

The combination of falling auction prices, crop losses and weaker exports has added to the financial pressure on tea estates.

At the same time, the cost of essential inputs has increased, while higher wages and bonus payments have increased outflows from estates.

With production affected by factors beyond the industry’s control, auction prices continuing to fall and costs rising, the tea industry in Assam and West Bengal is facing an increasingly difficult financial situation, with liquidity emerging as a major concern.