Tea exports slump in 2020 despite peak FOB price, crop plunges to lowest since 1997

COVID-19 pandemic apart, the tea industry has had a bad year in 2020, with exports down despite FOB price hitting a peak whilst production plunged to its lowest in 23 years

Tea exports in volume in 2020 declined by 9.2% or 27 million kilos to 265.5 million kilos from the previous year whilst in value terms, the performance was down by Rs. 10.4 billion or 4.3% to Rs. 230.1 billion from 2019, which recorded the highest figure. The latter is despite Free On Board (FOB) unit value of tea rising to highest ever of Rs. 866.70 per kilo, up by 5.4% from 2019.

Forbes and Walker Tea Brokers said bulk tea exports in 2020 amounted 118.2 M/kgs, down by 4.6 million kilos. Tea in packets dipped sharply by 21 million kilos to 118.1 M/kgs whilst tea bags dipped by 0.7 million kilos to 21.5 M/kgs.

Instant tea amounted to 2.8 M/kgs down by 0.2 million kilos. Green tea exports were down by 0.6 million kilos to 4.1 M/kgs.

Tea export revenue from bulk tea grew by Rs. 1.3 billion to Rs. 88.9 billion. Packeted tea was down by Rs. 8.5 billion to Rs. 96.8 billion. Export of tea bags declined by Rs. 2.2 billion to Rs. 31.8 billion. Instant tea exports marginally down at Rs. 4.10 billion. Green tea exports were down by Rs. 1.1 billion to Rs. 8.3 billion. 

Forbes said the total FOB value for January-December 2020 of Rs. 866.70 ($4.71) has shown a growth of Rs. 44.45 ($0.09) vis-à-vis Rs. 822.25 ($ 4.62) of January-December 2019, thus recording the highest ever FOB value surpassing the previous best which was realised during the corresponding period of 2019.

It said Turkey had retained the No. 1 position as the largest importer of Sri Lankan tea in 2020 followed by Iraq and Russia with Iran occupying the fourth position. Although Iran occupies the fourth position, a fairly substantial decrease in imports is recorded during January-December 2020 compared to the corresponding period of 2019. 

Other noteworthy importers are China and Chile where they have recorded a fairly significant increase in imports by 19% and 30% respectively. Meanwhile, destinations such as Azerbaijan, Syria, UAE, Libya, Germany, USA and Japan have all recorded a fairly significant decrease in imports during the period under review. 

In terms of crop, Forbes said it was down by 21.6 million kilos or 7.2% to 278.5 M/kgs which is the lowest production since1997. High Grown production for 2020 totalled 61.2 M/kgs down 0.5 million kilos. Mediums totalled 45.6 M/kgs down marginally by 0.3 million kilos whilst Low Growns amounted to 169.6 M/kgs down by 20 million kilos from 2019.

CTC production in 2020 rose by 0.5 million kilos to 24.1 M/kgs. High Grown CTC improved by 1.8 million kilos to 5.3 M/kgs. Medium Grown CTCs was marginally down to 8.2 M/kgs whilst Low Grown CTC crop was down 1.5 million kilos to 10.5 M/kgs.