Sri Lanka tea industry began the year 2023 with mixed results which saw lower export volumes, but with marginal increase returns, brokers said yesterday.
The country’s tea exports in January fell by 3.26 million kg to 17.56 million kg compared to 20.82 million Kg a year earlier.
However, the earnings in January increased to $ 99.56 million up from $ 91.93 million in the corresponding period last year.
When analyzing the main categories of export Forbes and Walkers said bulk tea, packeted tea and tea bags had shown a decrease compared to the corresponding period a year earlier.
Sri Lanka expects tea production to recover in 2023 to 300 million kilograms after output fell to 260 million kilograms in 2022 with former President Gotabaya Rajapaksa foolishly banning fertilizer and agro-chemicals.
“With the current conditions and the crop lost due to fertilizer issue and everything we expect around 260 million kilograms of tea by the end of 2022 which will bring the total revenue through tea selling to around 1.4 billion US dollars,” Chairman of Sri Lanka’s Platers’ Association Senaka Alawattegama said.Fertilizer is now coming back to tea farms but at a sharply higher price, he said.
According to industry sources, based on the quantity of 17.56 million Kg shipped, the FOB value of Rs. 2,055.34 ($ 5.66) is a significant increase of Rs. 1,107.10 compared to Rs. 948.24 ($ 4.73) recorded in June 2020. In dollar terms, more or less static. FOB value of $ 5.66 records an increase of $ 0.93 companies to the corresponding period of 2022.
Türkiye with 2.35 million Kg emerged as the largest importer for January 2023, displacing Iraq to second place with 2.13 million Kg (last year 3.8 million Kg), whilst Russia came in third with 2.04 million Kg and UAE was fourth with 1.87 million Kg.
Other notable importers are Saudi Arabia, Iran, China, Libya and Jordan.Sri Lanka produced around 251 million Kg of tea in 2022 due to the lagged effect of a fertilizer ban.
As a result of the organic agricultural mandate’s failure, Sri Lanka already had insufficient supply. The issue grew worse as a result of a shortage of foreign finance to source this raw material.
Industry analysts are confident that Sri Lanka’s second largest export sector – tea could earn over $ 1.3 billion by the end of this year, despite its hardships.