Vagaries of weather pose fresh challenges to tea industry
Saturday, 17 May 2014 00:31
High grown in exports value a silver lining
With drought crippling tea crop in Sri Lanka and several other producer nations, likely vagaries of weather in the coming months will force fresh challenges according to industry experts.
“Global warming has brought about changes in weather patterns throughout the world. In the recent past we have seen increased frequency of extreme weather,” John Keells Ltd. said.
“Conditions have once again turned dry with hot and humid conditions along with isolated afternoon showers reported from most planting districts. Most often, the second quarter of the year is seen as a high cropping period for major black tea producing countries. However indications are that this may not be the case this season,” John Keells added.
According to the broker Kenya’s tea crop in the first quarter was 112 million kilos, down by 5% whilst Sri Lanka’s crop was 73.5 million kilos, down by 8%.
Forbes and Walker Tea Brokers said tea production for March 2014 totalled 25.5M/kgs vis-à-vis 32.7M/kgs of 2013, showing a significant decline of 7.1M/kgs.
“All elevations have shown a decline YOY with Low Growns in particular showing a fairly substantial decline,” Forbes and Walker added.
It said January-March cumulative production for 2014 totalled 73.5M/kgs vis-à-vis 81.6M/kgs of 2013, showing a decrease of 8.1M/kgs for the period under review. Here again all elevations show a negative growth in 2014 compared to the same period of 2013.
CTC production too for the month of March of 1.6M/kgs show a decrease of 0.6M/kgs vis-à-vis 2.3M/kgs of 2013 with all elevations showing a negative growth compared to March 2013 whilst January-March cumulative production of 4.8M/kgs have shown a decline of 0.97M/kgs vis-à-vis 5.8M/kgs recorded during the same period of 2013.
“During this period Low Grown production have shown a marginal gain whilst High and Medium Grown’s show a negative growth compared to the same period of 2013,” Forbes and Walker said.
Reuters forecast Sri Lanka’s tea crop in 2014 for to be 350 million kilos.
Last year annual tea production rose 4.2% to a record high of 340.2 million kgs, surpassing its previous all-time peak of 331.4 million kgs in 2010. Export earnings also hit a record of $1.54 billion last year, surpassing the previous high of $1.48 billion in 2011.
As per Central Bank data export earnings from tea increased by 11.7% to $116 million as a result of the increase in both the price and volume of tea exported. The average export price of tea increased by 8.9%, to $5.16 per kg in February 2014 from $4.74 per kg in February 2013, while export volumes increased by 2.6%, year-on-year.
In the first two months value of tea exports amounted to $ 231.7 million, up by 13% over the corresponding period of last year. As per provisional data in March tea exports increased by 34% to $ 154 million.