Wednesday, September 27, 2023

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Tea exports down 22 percent in March, 15 percent in first quarter

By: Staff Writer

Colombo (LNW): Sri Lanka expects tea production to recover in 2023 to 300 million kilos, whilst targeting export earnings of $ 1.5 billion for the year. But the export revenue has come down in March doubting the reaching of this ambitious target, tea industry sources said.

Despite hopes of a turnaround with fertilizer, Sri Lanka’s tea production began the year with lower volumes.

Sri Lanka’s tea exports dipped 22 percent year-on-year (YoY) to 17.97 MnKgs in March continuing the declining trend seen in both tea production and exports in recent times, the data released by Forbes & Walker Tea Brokers showed.

Among the categories, bulk tea showed a substantial decrease, while packeted tea showed a significant increase, and to a lesser extent tea bags when compared to March 2022.

Cumulative exports for the January-March 2023 period too contracted by 15 percent YoY to 54.08 MnKgs.

Here again, tea in bulk showed a substantial decrease in export quantities, whereas packeted tea showed a significant increase and tea bags to a lesser extent when compared to March 2022.

Meanwhile, FOB value in March 2023 recorded an increase of Rs.973.73 to Rs.2, 018.87 compared to Rs.1, 045.14 in March 2022.

FOB value of US$ 6.10 per kilo in March 2023 was the highest ever FOB value for a calendar month in US dollar terms surpassing the previous best of US$ 5.74 recorded in October 2022. This was a gain of US$ 1.97 compared to March 2022.

In terms of markets, Türkiye has emerged as the biggest importer of Ceylon Tea with an increase of 102 percent YoY in January-March 2023. Iraq, which had decreased its imports by 54 percent YoY, secured the second position.

Russia ranked as the third largest importer of Ceylon tea whereas the UAE moved down to the fourth position with imports reducing by 27 percent YoY. Other notable importers were Libya, China, Azerbaijan, Saudi Arabia, Jordan and Germany.

According to Central Bank data for the January-February 2023 period, Sri Lanka earned US$ 204.1 million from tea exports, up by 6.3 percent from a year ago.

However, the Central Bank said “increased earnings from tea exports were mainly due to price increases as the volumes registered a decline.

Sri Lanka expects tea production to recover to 300 m kilos, earn $ 1.5 b from exports in 2023

.The woes of the tea industry continue with January crop volumes decreasing by 3.68 million kilos (16.13%) to 19.14 million kilos against the fertilizer issue.

Data analysed by Forbes and Walkers Research confirmed that the country’s tea production drop was seen at all elevation levels compared to the corresponding January 2022.

High-grown elevation produced 3.52 million kilos, a drop of 1.8 million kilos year-on-year (YoY) whilst medium elevation production was 2.39 million kilos compared with 3.78 million kilos in January 2022, a deficit of 1.4 million kilos.

Low-grown elevation dominated by the smallholder sector recorded 13 million kilos, losing approximately 0.4 million kilos or 3% against January 2022.

The production of green was at 161,634 kilos in January 2023, down by 18% YoY. As per the Sri Lanka Tea Board, the country’s total national production for the year 2022, was 251.50 million kilos compared with 299.49 million kilos in 2021. This was the lowest in 26 years when 246 million kilos were produced in 1995.

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