Bland kick off for Ceylon Tea cuppa in 2020

• January tea production dips 5.5%
• Export contracts by 7%
• Earnings fall from Rs.20.17bn to Rs.18.09bn
• Slowdown in interest from China and Hong Kong

By Shabiya Ali Ahlam
Sri Lanka’s tea cuppa kicked off on a grim note in January this year with production, export quantity, and value showing contraction compared to the corresponding month in the previous year.

According to Sri Lanka Tea Board (SLTB) data, January tea production was 21.9 Mnkg, which is 5.5 percent lower than the 23.2 Mnkg recorded in January 2019. The dampened production was despite the increase in High-Grown teas to 5.1 Mnkg from 4.8 Mnkg in January 2019.

Low-Grown production during January 2020 was down 9 percent to 13.3 Mnkg from a year ago. According to Siyaka Research, this year’s January figure is the lowest January crop recorded since 2011. 

The Mid-Grown teas recorded a marginally lower quantity of 3.5 Mnkg for January 2020 against 3.7 Mnkg in January 2019. 

With regard to tea exports, Customs data analyzed by Siyaka Research affirmed that Sri Lanka exported 22 Mnkg in January 2020, a 7 percent drop compared to the 23.6 Mnkg shipped in January 2019.

The rupee earnings having declined by 10 percent from Rs.20.17 billion to Rs.18.09 billion this year resulted in the approximate FOB value per kg of all tea shipped in the month of January to stand at Rs.818.86 per kg compared with Rs.852.14 per kg in 2019. 

“This year’s dollar earnings were US$ 99.73 million compared with US$ 112.1 million in January 2019. This is a 11 percent drop compared with a rupee loss of 10 percent YoY 2019,” said Siyaka Research in its latest tea report. Furthermore, it stated that a review of Sri Lanka’s main tea exporting destination suggests a continuation of last year’s trend when the top five destinations are analysed. 

Iraq leads with 3 Mnkg (+5 percent) followed by Russia 2.8 Mnkg (+1 percent), Turkey 2.7 Mnkg (+14 percent) and Iran 1.4 Mnkg (-13 percent) and Azerbaijan 0.87 Mnkg (+7 percent). 
Meanwhile, shipments to China were 0.836 Mnkg up 10 percent, up from last year’s figure of 0.758 Mnkg. 

Siyaka Research pointed out that January shipments were carried out on orders placed the year before, as there seems to be a slowing down in interest in China and Hong Kong in February. “The trade is anxiously following demand, to determine if the possible slowing down in RTD and other Cold Tea beverage sales would be compensated by increased consumption of hot beverage products,” Siyaka Research said.