Tea
Auctions (Mombasa/Colombo)
The world's most consumed drink after water, dominated by China and India, and sold the old way: by auction, with no futures market.
Top Producers
share of world made-tea production (FAOSTAT, FAO IGG on Tea)
Top Consumers
approximate share of tea consumption; China and India lead on volume (FAO IGG on Tea)
Main Uses
indicative split of tea use
Top Exporters
approximate share of world tea exports; Kenya leads black tea, China leads green (FAO IGG on Tea)
Top Importers
approximate; Pakistan is the largest black-tea importer (FAO IGG on Tea)
World production
roughly 6.5 to 7 million tonnes of made tea
as of 2024
Largest producer
China, close to half; India second
as of 2024
Largest exporter
Kenya (black tea); Mombasa the world's largest auction
as of 2024
Futures market
none; auction-priced (Mombasa, Colombo, Kolkata)
as of 2026
Tea is the world's most consumed manufactured beverage after water, yet it has no futures market and is sold the old-fashioned way, through auctions and private negotiation. Global production runs roughly 6.5 to 7 million tonnes of made tea a year, and China dominates, producing close to half the world total, followed by India a clear second, then Kenya, Sri Lanka, Turkey, and Vietnam. The split by type matters: China produces and drinks mostly green tea, while India and Kenya produce mostly black tea, which is the bulk of internationally traded tea.
The trade structure is distinctive. There is no liquid tea futures contract anywhere. Tea moves through long-established auction centers, the Mombasa auction in Kenya being the largest in the world (it clears East and Central African black tea), alongside Colombo in Sri Lanka and Kolkata, Guwahati, and Kochi in India, plus large volumes sold by direct contract, with auction averages serving as the reference prices. The reason auctions persist where futures never developed is heterogeneity: tea is not fungible but thousands of distinct products differentiated by origin, garden, grade (CTC versus orthodox, leaf versus dust), season, and processing, and a buyer for a big brand is blending dozens of tasted lots to a consistent flavor, which suits lotted auctions rather than a single deliverable contract.
On the buy side the market is concentrated among a few global packers: Unilever's tea business (Lipton, now Lipton Teas and Infusions), India's Tata Consumer (Tetley), and Twinings (Associated British Foods). Demand splits sharply by type and geography: green tea is concentrated in China and East Asia, black tea dominates South Asia, Africa, the Middle East, Russia, and the Commonwealth. Prices are volatile, weather-driven, and origin-specific rather than a single global benchmark, with several mature markets facing long-run pressure from oversupply of commodity-grade black tea.
How It Trades
| Venue | No futures market; tea auctions (Mombasa, Colombo, Kolkata) and direct sale |
| Benchmark contract | None; auction averages, the Mombasa auction the world's largest |
| Contract size | Physical; sold in lots by the kilogram, tasted before sale |
| Price terms | US dollars per kilogram at auction (local currency in some centers) |
| Settlement | Physical; weekly broker auctions and direct contracts |
| Typical curve | No forward curve; weather-driven, origin-specific, with no single global price |
| Liquidity | No exchange liquidity. Heterogeneity by origin, garden, grade, and flush, plus a centuries-old tasting-and-blending tradition, is why no standardized contract exists |
Supply and Demand
Top producers
- China: close to half of world production, mostly green tea
- India: a clear second, mostly black tea
- Kenya: the largest black-tea exporter
- Sri Lanka, Turkey, and Vietnam: the next tier
China's share has risen toward and past half as its green-tea output grows; Kenya's share swings with rainfall.
Top consumers
- China (largest total, green-tea culture)
- India (largest black-tea consumer, keeps most of its crop)
- Turkey (the highest per-capita consumer)
- The Middle East, Pakistan, Russia, the UK, and the US
Major uses
- Hot brewed tea (the overwhelming use)
- Ready-to-drink bottled and canned iced tea
- Instant tea, extracts, and specialty and flavored blends
What Moves the Price
- Weather: monsoon timing in Assam and West Bengal, rainfall and drought in the Kenyan highlands
- Labor cost and availability (tea is highly labor-intensive at harvest)
- Input costs, including fertilizer (the Sri Lankan fertilizer ban a stark example)
- Currency moves in producing and importing countries
- Structural oversupply of commodity-grade black tea
- Premiumization and the growth of green, specialty, and herbal segments
Moments That Made the Market
Antiquity
Tea originates in China and is drunk for millennia before spreading.
1773
British taxation of tea triggers the Boston Tea Party; tea is central to colonial trade politics.
19th century
Britain establishes plantations in Assam, Darjeeling, and Ceylon; the tea trade helps precipitate the Opium Wars.
20th century onward
Kenya, much of it smallholder-grown, rises to become the world's largest black-tea exporter.
What Changed Since the 2010 Handbook Era
- Kenya rose to become the largest black-tea exporter, much of it smallholder-grown.
- Premiumization and specialty, green, and herbal teas grew while mainstream black-tea volumes flattened.
- Climate change began shifting suitable growing zones in Assam and East Africa.