Tea prices have hit record highs, rising almost 35 per cent in the past 12 months, due to the impact of simultaneous droughts on the crops of the main exporting countries.

The sharp output falls in India, Kenya and Sri Lanka has come as demand remains robust in spite of the impact of the economic crisis, exacerbating last year's deficit. "Major black tea producing countries have continued to record lower production. . . owing to dry weather conditions," said Sicily Kariuki, managing director at The Tea Board of Kenya, the industry regulator.

The wholesale price of the best quality black tea, or BP1, rose last week to $3.69 a kilogram at the weekly auctions in Mombasa, Kenya - above the previous record of $3.63/kg last year. Wholesale best quality black tea prices have more than doubled from a decade low of $1.75/kg set in December 2001. Prices averaged $3.07 last year.