The world indicator price for tea rose 11.6% to 1.83 dollars per kilogram in 2006 from the previous year, the Rome-based Food and Agriculture Organization said in a report on tea trends in 2006, the latest figures available.
Production and consumption were converging at around 3 million tons.
"Although supply will outstrip demand, the gap will be closer than it has ever been," said Kaison Chang, an FAO tea expert.
Projections up to 2017 indicate that world black tea production will grow 2% annually to reach 3 million tons, while world green tea production is expected to grow at 4.5% annually to reach 1.6 million tons, the Food and Agriculture Organization said.
The greatest production increases have been in China, which was up 9.5% to 1 million tons, and Vietnam, where production rose 28% to 133,000 tons. India's output was up 3% with 945,000 tons in 2006.
The FAO's report on trends in the tea market was prepared for the Global Dubai Tea Forum to be held February 19-20.