Sri Lanka November tea exports lowest since May

Customs data analyzed by Siyaka Research has confirmed that Sri Lanka exported 23.6 mnkg in November this year, up a sharp 16 percent on last year’s low drought restricted figure of 20.4 mnkg. 
The November quantity is however the lowest since the May figure of 24.3 mnkg.  

Going back five years from 2015, exports have been in the region of 26–28 mnkg in November. Exports for the period January – November 2017 have reached 265 mnkg, a figure even lower than last year’s drought restricted quantity of 266.1 mnkg. The figure is the lowest since 2000.

Export earnings are however at a record high of Rs.213.8 billion or approximately US $ 1.4 billion due to higher tea prices in the global market place.

These earnings convert to an approximate FOB value of a highest ever US $ 5.29 per kg and a record rupee value of Rs. 807.12 per kg.

Sri Lanka exported 57 percent of all teas in value-added form, a proportion equal to last year. Contributing to the value-added segment, packet tea comprised 46 percent, tea bags 8 percent, instant tea 1 percent and green tea 2 percent.

Russia/CIS countries are the leading cluster of markets with imports of 49.2 mnkg accounting for 19 percent of all tea exports from Sri Lanka. Last year‘s figure was marginally higher at 49.4 mnkg.
Within this cluster, Russia imported 31 mnkg and accounted for 12 percent of all imports. Russia/CIS are also the second largest market for tea bags, with imports of 1.19 mnkg, whilst Australia is the prime destination with an absorption of 1.75 mnkg.  

Exports through Turkey has risen sharply to 35 mnkg (13 percent), up 43 percent on last year’s quantity of 
24 .7 mnkg. 

This market is followed closely with exports to and through Iraq, 31.3 mnkg against 30.8 mnkg a year ago. 

Direct shipments to Iran have dropped sharply by 20 percent YoY 2016 from 31.3 mnkg to 24.9 mnkg. 

The U.A.E handled 14.5 mnkg and Libya 11.5 mnkg.  Exports to China have grown to 8.9 mnkg from 6.9 mnkg.  

Japan has increased to 7.15 mnkg from 7.03 mnkg. Syria has declined 40 percent from 11.1 mnkg to 6.6 mnkg this year. 

Chile has grown from 5.9 mnkg to 6.4 mnkg and is followed by Germany at 6 mnkg; down from 6.4 mnkg last year. Hong Kong has grown from 4.1 mnkg to 4.6 mnkg. 

Russia to discuss restricted tea imports with Sri Lanka

MOSCOW (Reuters): Russia’s agriculture safety watchdog Rosselkhoznadzor plans to discuss restricted tea imports with Sri Lanka at the end of December, it said in a statement yesterday.

Russia placed temporary restrictions on imports of tea and all other agricultural products from Sri Lanka from Dec. 18 after a beetle was found in a tea consignment.

The watchdog met a delegation led by Sri Lanka’s ambassador to Russia in Moscow yesterday and requested information about steps being taken in Sri Lanka to secure the safety of tea intended for export to Russia.

The insect, known as the Khapra beetle, was discovered in the packaging of the consignment of tea from Sri Lanka, which has said it was an isolated case and that it would work with the Russian authorities to resolve the issue.

Russia was the second largest buyer of Sri Lanka’s Ceylon tea after Iran in 2016 with US$143 million worth of purchases, according to Sri Lanka’s Industry Ministry.

Sri Lankan tea accounts for 23 percent of the Russian market, with other supplies coming from India, Kenya, China and Vietnam, according to Rusteacoffee association. 

Kenya eyes Russia tea sales on Sri Lanka spat

Kenya wants to use the current tea trade spat — triggered by a single insect— between Russia and Sri-Lanka to boost its volumes to Moscow after years of low exports, the Kenya Daily Nation reported.

Wire agencies reported on Friday that Russia would place temporary restrictions on imports of tea and all other agricultural products from Sri Lanka from Tuesday after a single beetle was found in a consignment.

Tea directorate says it sees the current impasse between the two countries as an opportunity for Kenya to boost sales. “We see this as an opportunity and a challenge at the same time. An opportunity in the sense that we should use this chance to grow our volumes to Russia and also learn from the misfortune that befell Sri-Lanka to improve our standards,” said the directorate. The country has over the last one year been working on a strategy to improve the volumes of tea bought by Russia and cut the dominance of Sri Lanka, which is the leading exporter to Moscow. 

Kenyan delegation led by Cabinet Secretary in the Ministry of Agriculture will be visiting Moscow in January for the launch of the strategy.

Kenya is, third placed, both in terms of value and volume of tea exports to Russia. Moscow imports about 13 per cent of the beverage from the Mombasa auction accounting for about 18 million kilos, but the volumes have been dropping in the last three years.

“We are targeting to hit at least 44 million kilos of tea exported to Russia in the next three years mainly looking at increasing quality black tea,” said the directorate. 

It has hired Russian consultants to provide intelligence on the profile of a Russian tea consumer and how best Kenya can reach its market.

Kenya has identified and prioritised Russia because it is the leading importer of black tea while it is the leading exporter of the same. It will be tough for Kenya to win over the Russian market because Sri Lanka being the biggest exporter of tea to Russia has put in massive resources in the last 20 years to cement its position.