Tea production expected to rebound in second quarter

• Fertiliser availability and lower prices to support increased tea production
• Improved output expected owing to flush crop, and effects of application of fertiliser
• Tea output in April records YoY increase

The downward trajectory of Sri Lanka’s tea production is expected to reverse in 2Q23, tea brokers said.

Ceylon Tea Brokers in their latest market update shared that the months-long trend of dampened tea output will start reversing from May.

“Tea production is expected to increase, with Orthodox and CTC teas peaking this quarter despite facing fertiliser and weather-related challenges in recent years.

“Fertiliser availability and lower fertiliser prices to support increased tea production in 2H23,” it said.

The improved crop is expected owing to the flush crop, and the effects of the first applications of fertiliser after the unpopular fertiliser ban was lifted.

However, a key risk to higher production is the impending drought conditions which could be brought on by the El Nino phenomenon if it were to take place, Ceylon Tea Brokers pointed out.

“The increasing possibility of an El Nino season this year poses many threats to the production of tea in Sri Lanka, with the major threats being reduced rainfall coupled with higher temperatures which could choke tea production. This is expected to impact production in competitor markets as well,” the brokers said.

Tea production in 1Q23 dipped by 18 percent compared to its 11-year average.

The drop was brought on by lower fertiliser application, erratic weather patterns and poor practices such as overplucking in the long term, and reluctance towards replanting.

Ceylon Tea Brokers said corrective measures are not expected to improve production in the near term but are expected to improve yields over the medium-long term.

Meanwhile, tea production in April totalled 24.72 MnKgs, showing a marginal increase of 1.82 MnKgs when compared with the corresponding period in 2022.

Data from the Sri Lanka Tea Board showed that all elevations have shown a steady growth in volume in comparison with the corresponding period of 2022.

Accordingly, January-April 2023 cumulative production totalled 84.09 MnKgs, recording a decrease of 2.14 MnKgs in comparison to the cumulative output for the same period the previous year.