Value for Ceylon tea continues to soar

• August FOB values highest in both dollar and rupee terms

Value for Ceylon tea continues to soar with August recording the highest ever Free On Board (FOB) both in dollars and rupees.

Forbes and Walker Tea Brokers said the FOB value of Rs. 1,951.82 in August 2022 records the highest ever in a calendar month, surpassing the previous best of Rs. 1,863.74 achieved in July. The FOB value has seen an increase of Rs. 1,034.62 compared to Rs. 917.20 of August 2021 and in USD terms a gain of 0.82. In the first eight months of 2022, the FOB value of Rs. 1,470.54 reflects an increase of Rs. 543.33 per kilo as against Rs. 927.21 in the corresponding period of last year.

Asia Siyaka Commodities PLC said the FOB value per kilo in August was $ 5.41, the highest in more than 20 years. Last year FOB value for August was $ 4.55 and the previous record $ 5.29 in 2017. It said considering that there has been no significant improvement in value addition, while freight rates remain high, global black tea supply situation remains largely unchanged, this FOB rate primarily results from a spike in tea auction prices driven by a sharp drop in quantities available for sale in Sri Lanka.

In August, tea exports amounted to 23 million kilos, down by 2.47 million kilos from a year ago. In the first eight months exports totalled 171.06 million kilos down by 16.51 million kilos or 8.8% from the corresponding period of last year. All categories have witnessed a decline in comparison with the corresponding period of 2021, Forbes said.

Value wise the country earned $ 819 million in the first eight months down by 7% from a year ago and it is the lowest since 2008. 

Forbes said Iraq has remained the number one major importer of Ceylon Tea with an increase of 31% in imports YoY for January-August 2022. Russia has secured second position with a total of 14.98 million kilos, which is a 19% decrease against total imports recorded for January-August 2021.

UAE sits in third place with a total of 14.78 million kilos followed by Turkey, Iran, Azerbaijan and Libya respectively during the period January-August 2022. A significant decrease in imports is reported from Turkey (58%), China (20%), Syria (23%), Japan (12%) and Jordan (21%) YoY.

Forbes also said a notable increase in imports is recorded from Azerbaijan (7%), Germany (8%), USA (7%), Saudi Arabia (4%) and Poland (15%) YoY as expanding markets for ‘Ceylon Tea’.