Lankan tea production declines to 53.1 M/Kgs | Daily News
Prices total auction average increase by Rs. 9.51

Lankan tea production declines to 53.1 M/Kgs

Sri Lankan tea production declined to a 53.1 M/Kgs from a 73.4 M/Kgs during the corresponding period in 2019 (a decline of 27%). Auction Averages/Prices Total auction average of Rs. 594.81 showed an increase of Rs. 9.51 compared to Rs. 585.30 recorded during the first quarter in 2019.

Earnings from tea exports of Rs. 49.2 billion records a deficit of Rs. 13.2 billion vis-à-vis Rs. 62.4 billion during January-March 2019. Overall FOB values too declined to Rs. 826.39 in 2020 from Rs. 847.57 in 2019.

Mid Growns appreciated Rs. 9.86 quarter on quarter, whilst Low Growns showed a gain of Rs. 19.51. However, High Growns recorded a decline of Rs. 19.61. Exports Tea Exports totalled 59.5 M/Kgs, recording a decline of 14.1 M/Kgs vis-à-vis 73.6 M/Kgs during the corresponding quarter in 2019.

Global tea production fell in 2020 after a continuous increase for many years as weather conditions have been mixed and in many major tea producing countries. Kenya would be the only exception where production has increased quite significantly and largely reflects a cyclical recovery after a drought induced decline in 2019.

Indian production was badly impacted by the Coronavirus pandemic with restrictions on tea plucking during the shutdown of economic activity in March-April and thereafter the heavy rain, resulting in flooding in most parts of Northern India contributed to an estimated 15% fall in production in 2020.

This could be quite significant particularly considering that almost 80% of India’s production is absorbed by its domestic demand.

Whilst there was some hope of recovery in the second half of the year, the continuation of the pandemic shattered all hopes, which meant the uncertainty continued. Consequently, lower fiscal revenues and higher public expenditure placed many countries in a slump.

Notwithstanding the gloom and doom – tea, with its wellness properties and considered to be a cheap beverage, gathered widespread interest globally which helped the wheels of the tea industry to keep turning. Consequent to the lower volumes that were harvested from around the latter part of 2019, prices were edging up on the previous year’s levels, which was propelled quite sharply following the pandemic, where consumers around the world went on a panic buying spree of food items, of which, tea was no exception. Consequently, many importers remained desperate for urgent shipments, which led to strong buying at the Colombo Tea Auctions.

Once again, the tea industry showed its resilience by rising to the occasion in digitalising the auction in a very short period of time, which facilitated the uninterrupted sale of tea. This was initiated by the Colombo Tea Traders’ Association (CTTA) and supported by the Colombo Brokers’ Association (CBA) and its technical partner CICRA Holdings.