Trying time for tea

Friday, 28 October 2011 03:54 - - {{hitsCtrl.values.hits}}

Amidst trying times for the tea industry, exports had crossed the US$ 1 billion mark faster this year than 2010 as overall performance remains mixed.

Asiya Siyaka Research quoting Customs data said that Sri Lanka has earned approximately US$ 1.088 billion from exports during the first nine months of the year.

This is said to be the first time the country has crossed the billion dollar mark by September, while last year’s figure for the period was US$ 995 million. In 2010 the country went on to earn a record US$ 1.37 billion.

In rupee terms, Sri Lanka has earned a record Rs. 120.3 billion, 6% up on last year’s January-September figure of Rs. 113 billion.In the month of September, tea exports at 26.1 million kilos are however lower by 16% on the August quantity of 31 million kilos whilst in comparison to September last year it was down by 10%.

Cumulative figure for first nine months nevertheless was up 3% to 236 million kilos.

Forbes and Walker Tea Brokers said total revenue realised in September at Rs. 13.1 billion reflected a Rs. 1 billion decrease over the corresponding month of last year. However, the approximate units FOB value per kg of Rs. 503.78 in 2011 shows a gain of Rs. 18.87 vis-à-vis Rs. 484.91 of 2010. First nine months’ unit FOB value of Rs. 509.79 also reflected a gain of Rs. 18.53 as against Rs. 491.26 realised during the same period of 2010.

Tea in bulk has shown a growth whilst tea in packets and tea in bags have shown a significant decline in September, Forbes said, adding that first nine months’ teas in bulk together with tea in packets have shown a growth whilst green tea too has shown a marginal gain. Tea in bags however show a decrease compared to the same period of last year.

Asia Siyaka said marketwise, Russia or CIS have grown significantly 15% YoY in 2010, which recorded 52.3 million kilos. This year the number stands at 60.3 million kilos.

Iran’s 21.5 million kilos follows with 9% absorption of all exports. Syria has imported 21.1 million kilos – up 4% from 2010, despite its internal issues.

An important transit point, the UAE has dropped imports sharply by 26% to 17.1 million kilos this year as against 23.1 last year.

Asia Siyaka said considering that total exports have been maintained to the region, it is likely that this volume is moving through other channels or going direct to destinations. Iraq which follows is a good example with imports of 15.9 million kg up 65% from 9.6 a year ago.

Similarly, quantities to Turkey have increased from 13.6 to 15.3 million kg this year.

Japan, a key importer of high value high grown, has increased imports by 8% to 8.7 million kg this year. Kuwait, similar to the UAE, has dropped imports from 9.5 million kg a year ago to 6.8 this year.

Mixed performance in the export arena is whilst plantation companies are expressing concerns over the spike in wages and overall costs impacting their profitability.