Sri Lanka Tea volume sold at auctions declines but prices soar in 2022
Sri Lanka’s total tea export revenue stood at US$ 1.2 billion for 2022 and the export volume for 2022 was 250mn/kg, although tea volume sold at Colombo auctions in 2022 was lower but prices rose to highest since 2017 Chairman of the Sri Lanka Tea Board Niraj De Mel said.
Iraq was the leading export destination for Ceylon tea having imported 41 million Kgs and accounting for 18% of the total export volume. Other key export destinations for Ceylon tea were Russia (22.96 million Kgs),
UAE (20.31 million Kgs), Turkey (13.52 million Kgs), Iran(11.96 million Kgs), Azerbaijan (11.27 million Kgs), Libya (10.79 million kgs), China(10.48 million Kgs), Chile(6.22 million Kgs) and Germany (6.17 million Kgs).
Owing to the marked decline of supply caused by production shortfall, coupled with the sharp depreciation of the Sri Lankan rupee against the US dollar, tea Auction prices registered a steep increase, moving up to an average of USD 3.80 per Kg by end November 2022 from USD 3.10 per kg at the beginning of the year.
Tea volume sold at Colombo auctions in 2022 was lower but prices rose to highest since 2017, Forbes and Walker Tea Brokers revealed yesterday.
It said January-December 2022 cumulative average of Rs. 1,234.24 ($ 3.83) was a significant increase of Rs. 618.80 vis-à-vis Rs. 615.44 ($ 3.13) of January-December 2021, thus establishing the highest-ever average for a calendar year in rupees.
In dollar terms the average of $ 4.11 recorded in the year 2017 remains the highest. Forbes and Walker said high growns for the period January-December 2022 of Rs. 1,093.10 ($ 3.40) have shown an increase of Rs. 505.97 vis-à-vis Rs. 587.13 ($ 2.98) during January-December 2021. medium growns averaging Rs. 1,030.82 ($ 3.20) have shown an increase of Rs. 480.02 vis-à-vis Rs. 550.80 ($ 2.80) January-December 2021.
During the year 2022 (up to November), a total of 231 million Kgs was exported. This was 12% lower than the 262 million Kgs exported during the same period of last year.
The export earnings in real value decreased by USD 168 million from USD 1.21 billion (USD 1,214 Million) recorded in 2021 to USD 1.05 billion (USD 1,046 million) up to November in 2022. Lower earnings were attributed to low production in the year under review.
Made tea production for the year up to end November was 231.87 million Kgs. This is significantly lower compared to 278.96 million Kgs recorded for the same period in 2021. It is also lower than 250.19 million Kgs produced during the corresponding period in 2020.
Out of the total production for 2022, the Smallholder sector output was 174.71million kgs (75%) while the RPC sector accounted for 75.8 million kgs (33 %).
Both sectors recorded decreased outputs with the greatest decline of 20% being registered from the RPC sector. The production shortfall in the small holding sector was 16%.
Subsequent to the banning of Chemical fertilizer by the Government of Sri Lanka in 2021, tea growers and large plantations, in particular, were forced to only use organic fertilizer which too was not adequately available resulting in a negative impact on the Tea production. A drop of 17% compared to the previous year has been recorded up to the end November 2022.