Tea output falls to 7-year low; export volume drop to 14-year low

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Reuters: Sri Lanka’s tea output hit a seven-year low in 2016, falling 11.1% in its third straight year of declining production, the State-run Tea Board said on Thursday. It blamed the fall on adverse weather.

Tea exports dropped to a 14-year low, broker data showed.

However, production in December surged by 14.7% from a year earlier, up for the second month running, the board’s data showed, having fallen for nine consecutive months through October because of severe drought, poor application of fertilisers and a Government ban on pesticides. “Mainly it is the weather that impacted production in 2016,” said Sri Lanka Tea Board Director-General S.A. Siriwardena.

Sri Lanka’s 2015 tea output fell 2.7% year-on-year to 329 million kg, missing forecasts for a second consecutive year because of heavy rains.

Tea is Sri Lanka’s top agricultural export commodity and one of the main foreign currency earners for the $82 billion economy.

Forbes & Walker Tea Brokers, in its market report, said Sri Lanka’s 2016 tea exports fell 5.9% to 288.7 million kg in 2015, while export volume plummeted to 287.2 million kg, its lowest since 2002.

Export earnings fell 5.3% to 1.26 billion dollars in 2016 from $1.33 billion dollars in 2015. Sri Lanka recorded its highest earnings of 1.63 billion dollars in 2014.

Russia was the largest importer of Sri Lankan tea in 2016, followed by Iran and Iraq. Turkey dropped to fourth position in 2016 from second in 2015.

Export volumes to other major buyers such as United Arab Emirates, Libya, Syria and Kuwait fell significantly last year, the broker report said.