Tea revenue declines by Rs. 800 m from Jan-Sept.

• Production dips by 3.5 m kilos, drop seen across all export categories

Revenue from tea exports in the first nine months of the year showed a decline of Rs. 800 million, with production dropping by 3.5 million kilograms as all categories of bulk tea, packet tea and tea bags showed a decrease, Forbes and Walker said in a statement yesterday. 

For the period January-September 2018, exports totalled 212.3 million kilograms compared to 215.8 million kilograms for January-September 2017, recording a decrease of 3.5 million kilograms. On a cumulative basis, all the main categories of exports such as bulk tea, packet tea and tea bags have shown a YOY decrease. 

Meanwhile, total revenue of Rs. 172.6 billion translates to a deficit of Rs. 0.8 billion compared to Rs. 173.4 billion from January-September 2017. However, the total FOB value for January-September 2018 of Rs. 813.09 shows a gain of Rs. 9.33 compared to Rs. 803.76 from January-September 2017.

Sri Lanka Tea Exports for September 2018 remained static, totalling 25.6 million kilograms compared to September 2017. Bulk tea, together with teabags, have shown a YOY growth, while packeted tea shows a decrease compared to the corresponding period of 2017. 

Analysing the total revenue of Rs. 20.1 billion reveals a deficit of Rs. 0.8 billion compared to the Rs. 20.9 billion of September 2017. Consequently, the FOB value of Rs. 784.40 for September 2018 too has recorded a deficit of Rs. 32.30 compared with the Rs. 816.70 of September 2017, the tea broker said. 

Overall Auction quantities increased and totalled a 5.6 million kilograms. Low Grown/Large Leaf teas continued to witness excellent demand, whilst the High and Mid Grown Small Leaf teas once again experienced bearish sentiment, particularly as the sale progressed.

Ex-Estate offerings totalled 0.98 million kilograms. Overall, the quality of teas maintained a reasonable all-around standard and to this extent, the bearish sentiment experienced was somewhat disappointing.

Best Western BOP/BOPF had on offer a few select invoices that appreciated following special inquiry, whilst all other BOP/BOPF on average declined by Rs. 10-20 per kg and Rs. 20-30 per kg respectively. 

Improved demand for Nuwara Eliyas was indeed encouraging, with select invoices recording substantial price gains. Teas from the Udapussellawa region were irregular following quality, whilst most teas from the Uva region sold around last week’s levels. High and Mid Grown CTCs declined Rs. 20-30 per kg, whilst corresponding Low Growns sold around last. There was better demand for liquoring leafy teas.  

Low Growns totalled 2.3 million kilograms in the Leafy/Tippy catalogues, a slightly larger volume when compared to the preceding sale. There was excellent demand all around. In the Leafy catalogue, BOP1/OP1s were fully firm to dearer. OP/OPAs too met with good demand and prices were fully firm to dearer, particularly for the cleaner teas at the lower end. Select best PEK/PEK1s were firm, others gained Rs. 10-20 per kg and at times substantially more. 

In the Tippy catalogue, better FBOPs were fully firm. Others and FF1s gained Rs. 5-10 per kg and more. At the lower end too, cleaner types were fully firm to dearer. Others were barely steady. In the Premium catalogue, high priced teas maintained, others met with better demand and were dearer to last. There was good demand from shippers to CIS, Turkey, Dubai, Iraq and Saudi Arabia.

When analysing the major importers, Iraq has retained the number one position followed by Turkey and Russia. Meanwhile, Iran has occupied fourth position. Other noteworthy importers are the UAE, Libya, Azerbaijan, China and Syria.