India's Tata Tea Ltd is expected to report a 27% decline in its third quarter profit after tea prices hit record lows last year. Tea prices fell as much as 40% last year, according to J. Thomas & Co., the world's largest tea brokerage, hurting all tea producers.

"When prices [of loose tea at auctions] fall, they have to reduce their prices of branded tea, otherwise people will move to loose tea," said Nirav Sheth,. an analyst with SSKI securities in Mumbai.

Tata Tea, the world's second largest tea company, plans to introduce the premium Tetley brand in the local market for people with higher incomes. The company hopes the move will leave it less vulnerable to fluctuating tea prices.