July tea output down 7.3%

Reuters: Sri Lanka’s tea output fell 7.3% in July from a year earlier, the State-run Tea Board said on Monday, and brokers attributed the fall to adverse weather conditions.

“There was excessive rain and overcast conditions, especially at higher elevations, resulting in lower high-grown crop due to excess rain. Other areas were also hit by adverse weather,” Anil Cooke of brokers Forbes & Walker said. 

“But now excess rain conditions are easing, and we expect a better crop in the rest of the year.”

Production in the first seven months has risen 0.2% from the same period last year.

Tea is Sri Lanka’s top agricultural export and one of the main foreign currency earners for the $87 billion economy.

Earnings from tea exports for the first five months rose 1.6% to $599.3 million, compared with the same period last year.

Sri Lanka’s tea output rose 5% to 307.1 million kg last year, recovering from a seven-year low of 292.6 million kg hit in 2016.

Industry officials expect production to reach 320 million kg this year if the weather holds, but a ban on cost-effective weed-killers, disruption of regular agricultural practices and the high cost of fertilisers could affect the outlook for production.

Tea production in 2017 was affected by severe drought followed by flooding and poor application of fertilisers, while a Government ban on pesticides and restricted labour added to the sector’s woes.

Tea exports down in July 

Tea exports in July have declined volume and value wise compared to a year earlier, Asia Siyaka Commodities said yesterday. 

It said exports amounted to 25.2 million kg in July, down 6% from the corresponding month of last year. However, July 2018’s performance is better than that of June, which was 24.7 million kg. The first seven months’ cumulative tea exports amounted to 162.7 million kg, lower in comparison to 165.3 million kg a year earlier.  In value terms, January to July exports were $854 million, down from $871 million last year.

 In July, exports were worth Rs. 19.95 billion, down by 9% from a year earlier.

A key destination for Sri Lankan tea exports was Russia/CIS, though down to 29 million kg from 31 million kg last year. Exports to Iran declined from 15.6 million kg to 13.3 million kg.  Japan’s purchases were down 15% to 4 million kg. Turkey’s purchases were nominally higher at 20.2 million kg, but Asia Siyaka Commodities said its purchases were likely to dip in August, following the currency crisis.

China continues its positive trend and is up 17% from 5.3 million kg to 6.3 million kg this year, whilst exports to Iraq has grown to 22.6 million kg from 18.5 million kg.