In the first
half of 2020, Sri Lanka produced 129.04 million tonnes of tea down 18.76 per
cent from a year earlier, and exported 129 million tonnes, down 14.50 per cent,
with Iraq, Turkey, Russia and Iran being the top buyers, a tea broker said. Sri
Lanka saw production and sales disruption following the implementation on March
20 of a coronavirus lockdown. Still, the sector slowly returned to service as
the government selectively allowed the economic activity to resume.
In the first
half of 2020, Iraq had purchased 16.2 million tonnes, down from 19.6 million
tonnes in 2019, and Turkey 15.7 million tonnes from 18.1 million tonnes, Customs
data released by Ceylon Tea Brokers revealed. Russia purchased 14.4 million
Ceylon tea down from 14.9 million a year earlier while Iran purchased 8.9
million tonnes.
Certain CIS
countries purchased 6.7 million tonnes while China purchased 5.0 million tonnes
and Chile purchased 4.6 million tonnes. Syra had purchased 3.5 million tonnes
of tea from Sri Lanka and 3.4 million tonnes from Saudi Arabia, and 3.3 million
tonnes of tea from UAE.
In the first six
months of 2020, Sri Lanka sold 56.8 million kg of bulk tea taking in 42.7
billion rupees, down from 59.9 million kilograms (44.4 billion rupees) a year
earlier. Sri Lanka sold 54.2 million kilograms of tea in packets worth 43.7
billion rupees, down from 69.4 million kilograms in the previous year.
With 75.4
million kilogrammes of mid-growth developed, low-growths led the table to 22.7
million kilogrammes, and high-growths amounted to 30.8 million kilogrammes. The
total volume of tea exported for June 2020, including re-exports with imported
tea, amounted to 23.69 million kilogrammes, showing a decrease of 0.42 million
kilogrammes or 1.73 per cent in contrast to the same time last year.
Total export
earnings were up 1.39 billion rupees compared with the same month in 2019. In
the first six months of 2020, Sri Lanka received 106 billion rupees from tea exports.
Output in June was down 26.8 million kilogrammes from last year's 27.5 million
kilogrammes.
The output for
June, in terms of the elevation-wise breakdown, showed that 57.1% of the tea
produced was low-growth while only 15.9% were mid-growth drinks, while 27% of
high-growth beverages. In the last few auctions, tea auction prices showed
mixed patterns as the market now worked following a price correction caused by
pre-lockdown bulk purchases following a period of tea starvation back in April.
OSL Take: The
government of Sri Lanka has in the past few months taken several steps to
develop the country's tea industry. Local tea exports have also recorded an
increase. The country's tea industry, which manufactures the world-renowned
Ceylon Tea brand, is open for investments. Foreign investments are now free for
the upgrading and development of the tea sector.
The state has
also given stakeholders in the industry many incentives. All these have
increased business/investment opportunities in the tea industry.
Interested
foreign investors can now explore investment opportunities in Sri Lankan tea.
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