• Mon. Jan 30th, 2023

Sri Lanka’s tea production to fall to a 27-year low this year

As a result of bad policy combined with adverse climatic conditions, Ceylon tea production was adversely impacted and annual volumes are estimated to be approximately 250-255 M/Kgs would record the lowest volume since 1995, according to Forbes and Walker Tea Brokers.

Tea production in November totaled 20.24 M/Kgs, with a marginal increase of 0.18 M/Kgs vis-à-vis 20.06 M/Kgs of November 2021. High and Low Grown elevations have shown a gain, whilst the Medium Growns have shown a decline over the corresponding month of 2021. When compared to the 24.91 M/Kgs of November 2020, November 2022 shows a decrease of 4.67 M/Kgs.

 January-November 2022 cumulative production totaled to 231.86 M/Kgs, recording a significant decrease of 47.10 M/Kgs vis-à-vis 278.96 M/Kgs of January-November 2021. This would be the lowest recorded for the period under review since 1995 where it recorded approximately 225.70 M/Kgs. 

 Tea export earnings from a rupee perspective were up by significantly to Rs. 372 billion vis-à-vis Rs. 241 billion during the period January to November and records a 54% gain year-on-year. However, in real terms, it fell to US$ 1.17 billion in 2022 vis-à-vis US$ 1.23 billion in 2021.

“Whilst the industry has demonstrated its resilience and delivered the much-needed foreign exchange for the country during what could be considered one of the dismal years from an economic angle, the sustainability of the industry continues to be threatened in many ways. The recent facilitation of fertilizer by the Sri Lanka Tea Board and the Ministry of Plantation would perhaps help to arrest any further decline in production and the industry looks forward to stabilizing the declining trend in the forthcoming year (2023),” the Tea Broker stated.

Consequent to anticipated improved availability, tea prices are also likely to stabilize at more realistic levels in Q2 2023 enabling the exporter sector to be more competitive and restore the presence of ‘Ceylon Tea’ in its traditional markets.       

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