By: Staff Writer
February 23, Colombo (LNW): The Sri Lankan tea industry has entered 2025 with cautious optimism, witnessing steady production growth and emerging opportunities in key markets.
While global demand for high-quality Ceylon Tea remains robust, industry stakeholders are focused on enhancing production efficiency, sustainability, and market diversification.
Despite ongoing challenges such as climate variability, rising input costs, and labor concerns, the sector is expected to maintain stable growth, with an estimated annual output of 280 million kilos.
Industry experts predict that Sri Lanka will benefit from increasing demand in markets like India and China, while traditional buyers such as Iraq, Russia, and Libya continue to play a vital role in sustaining export performance.
A significant shift in the industry has been the growing emphasis on value addition, particularly in tea packets, tea bags, and instant tea.
This trend aligns with global consumer preferences for convenience and premium specialty teas. Investments in mechanization and sustainable agricultural practices are expected to improve efficiency while ensuring the long-term viability of the tea sector.
Additionally, government policies and incentives for sustainable tea cultivation, alongside improved use of fertilizers and technological advancements, are anticipated to bolster production and export performance.
The year started with mixed results, with Sri Lanka recording a modest increase in tea export volumes while experiencing fluctuations in export value. In January 2025, tea exports reached 19.37 million kilos, reflecting a slight growth of 0.61 million kilos compared to 18.76 million kilos in January 2024.
Value-added segments, including tea packets, tea bags, and instant tea, performed well, whereas bulk tea and green tea saw declines.
The free on board (FOB) value for tea in January 2025 averaged Rs. 1,722.78 per kilo, showing a year-on-year (YoY) decrease of Rs. 26.14 from Rs. 1,748.92 in January 2024.
However, in US dollar terms, tea exports experienced a marginal increase of $0.38, signaling stability in international markets despite currency fluctuations.
While all tea categories reflected slight gains in dollar terms, rupee-based earnings declined across most segments, except for instant tea.
Iraq emerged as the top importer of Ceylon Tea, with imports reaching 3.02 million kilos, marking a 21% YoY increase from 2.50 million kilos in January 2024.
Russia remained the second-largest importer, although its imports declined by 11% YoY to 1.77 million kilos from 1.98 million kilos in 2024. Libya recorded an exceptional 406% YoY growth, securing the third position with 1.68 million kilos.
Other key importers in January 2025 included the UAE (1.27 million kilos, down 36% YoY), Türkiye (1.08 million kilos, down 37% YoY), Chile (0.78 million kilos, up 24% YoY), Saudi Arabia (0.89 million kilos), and China (0.80 million kilos, up 5% YoY).
In 2024, Sri Lanka exported a total of 245.7 million kilos of tea, generating $1.4 billion in revenue, slightly surpassing the 2023 figure of 241.9 million kilos.
A significant achievement was the record-high export value of Rs. 437 billion, approximately $1.435 billion. With projections of 280 million kilos in 2025, the industry remains cautiously optimistic about future growth, focusing on production efficiency, quality enhancement, and market expansion to sustain its global competitiveness.
