Tea exports at 7-year low

Thursday, 26 January 2017 00:15 - - {{hitsCtrl.values.hits}}

December tea exports data released this week by Sri Lanka Customs shows shipments for the period of January-December 2015 at 288.7 Mnkg against 306.9 Mnkg, Asia Siyaka Commodities said yesterday.

It said the last occasion the country exported less than 300 Mnkg in a year was in 2009 following the previous year’s banking crisis and El-Nino drought that reduced supply in 2009. Similarly in 2016 tea production declined more than 40 Mnkg against 2015.

With supply pressure starting Q4 2015 auction prices rose around mid-year.

With tea prices up, total value of tea exports in 2016 rose to Rs. 184.7 b against Rs. 182 b during January-December 2015. This was in spite of quantity shipped dropping 6% to 288.7 Mnkg against 306.9 Mnkg the previous year.

Despite the higher rupee earnings depreciation of the SLR played its part, as US Dollar earnings at approximately $ 1.26 b were lower than 2015 earnings of $ 1.33 b. Highest earnings in a calendar year was $ 1.63 b in 2014.

Value added exports which include all tea other than shipments in bulk form remains steady at 57% of the total. Shipments in packets held at 47% of the total, but tea bag exports increased to 8% of the total compared with 7% the year before. Absolute quantity shipped in tea bags was also higher at 23 Mnkg compared with 22 Mnkg the year before.

A review of destinations shows that the Russia/CIS cluster absorbed 53.6 Mnkg against 55.9 Mnkg the year before. Iran follows with direct imports of 33.9 Mnkg against 30 Mnkg a year ago. Iraq 32.5 Mnkg is also up YoY on the 2015 quantity of 31 Mnkg.

Turkey as a point of transshipment diminished in 2016 with quantities down to 27 Mnkg form 33.7 Mnkg a year ago. Similarly the UAE dropped from 23 to 18 Mnkg. Shipments to Libya almost entirely inpacketed form increased sharply from 9.9 Mnkg to 12.6 Mnkg in 2016.

Syria, the other trouble spot, was up 9% YoY 2015 to 11 Mnkg to 12.1 Mnkg. Of deep concern is the value of shipments to Japan that declined 8% from 8.4 Mnkg to 7.7 Mnkg. This is against a national export drop of 6%.

China grew marginally to 7.6 Mnkg from 7.4 Mnkg. This is a good performance on a lower national total. Germany follows with imports of 6.8 Mnkg against 6.9 Mnkg, followed by Chile importing 6.6 Mnkg compared with 6.9 Mnkg the year before. U.S.A shows a welcome improvement of 20% YoY 2015 with imports of 5.2 Mnkg against 4.3 in 2015.