Sri Lanka’s tea industry is entering a period in which its long-standing export strength is increasingly exposed to production volatility, uneven regional performance and mounting climate uncertainty. August’s sharp output decline has not merely reduced the month’s harvest; it has exposed the vulnerability of a sector whose export earnings depend on maintaining consistent volumes and quality across widely differing growing regions.
The latest figures from Forbes & Walker Research show national tea production falling to 19 million kilograms (MnKg) in August 2026, compared with 19.72 MnKg a year earlier and 21.34 MnKg in August 2024. The decline of 3.65% year-on-year and nearly 11% against 2024 indicates that the industry remains below recent production levels.
The High Grown sector has become the clearest warning signal. Output fell 16.17% year-on-year to 3.02 MnKg, while Asia Siyaka Commodities placed production at approximately 3.1 MnKg. The brokerage described the figure as the lowest monthly High Grown output recorded since 1992, a year remembered for severe El Niño-related drought conditions.
However the immediate cause of August’s weakness was not drought. Asia Siyaka said excessive rainfall and persistent overcast weather adversely affected production. This distinction is important because it demonstrates that the industry’s exposure is not limited to one type of climate shock. Too little rain can damage tea bushes, but too much rain can also disrupt harvesting, reduce productivity and affect leaf quality.
The brokerage’s reference to 1992 was intended to underline the risks facing the first quarter of 2027, when extremely dry and hot conditions are anticipated. Department of Meteorology records from the 1991–1992 El Niño event showed that approximately 46% of Sri Lanka’s land area received less than 10% of normal rainfall between January and March. High Grown production fell to only 2.2 MnKg in April 1992.
The cumulative figures reveal a sector recovering unevenly rather than uniformly. Production during January–August 2026 stood at 172.21 MnKg, down 2.7% from 176.98 MnKg in the same period of 2025. Against 2024, the decline was marginal at 0.16%. However, Medium Growns fell 6.21% year-on-year to 29.75 MnKg, while Low Growns declined 2.81% to 103.37 MnKg.
High Growns were marginally ahead of last year at 37.35 MnKg, and Green Tea rose 8.17% to 1.74 MnKg. Asia Siyaka similarly estimated High Grown output at 38.3 MnKg against 38.1 MnKg in 2025, with Medium Growns at 30.4 MnKg and Low Growns at 103.3 MnKg.
The manufacturing breakdown adds another dimension. Orthodox Tea, produced through the traditional whole-leaf process, declined about 3% year-on-year, while CTC tea, commonly used in tea bags, rose almost 7%. Green Tea increased 8%. This suggests that production changes are also influencing the composition of Sri Lanka’s tea offering.
For the economy, the consequences extend beyond plantations. Tea exports generate foreign exchange, support rural employment and sustain a broad network of factories, transporters, brokers and exporters. A prolonged production decline could reduce export availability and weaken earnings, while inconsistent quality could affect market positioning.
The central issue is therefore not simply whether Sri Lanka produces more tea next month. It is whether the industry can maintain reliable output, adapt to increasingly variable weather and protect export revenue before short-term production shocks become a longer-term structural problem.