Consumer brands group AVI, the owner of household names such as Five Roses and Freshpak Rooibos, says its Rooibos input cost spiked 27% as a result of the local drought in 2017/18.
With better rainfall last year, most product prices stabilised somewhat – except for Rooibos. The same box of 80 teabags still costs R54. The price climbed steadily from R29 for a box of 80 tea bags to over R50.
Rooibos Ltd MD Martin Bergh says Rooibos is a medium-term agricultural crop, meaning it only yields two years after planting. In addition, the four-year drought resulted in a lack of the total yield of the plantations and it is not sure how long this lack will last. However, Rooibos Ltd expects this year’s crop to meet the total demand so prices to farmers are in the process of dropping, which will also impact the market place. According to Bergh, as soon as the brands get through the expensive stock the prices might start stabilising, which could be sometime during the year.
Listen to CapeTalk interview with Rooibos Ltd MD Martin Bergh and read more here:
CapeTalk: Why rooibos tea price remains high despite improved rains