Sri Lanka’s March tea production declines

Sri Lanka’s tea production during March has declined by 23% when compared with the same month a year ago, as bad weather has impacted crops in all tea growing regions.

According to the John Keells Tea Brokers, during March 2012, Sri Lanka has only produced 27 million kilograms of tea compared to 35 million kilograms produced in March 2011.

Meanwhile, the Tea broker says the impact of the devaluation and rising energy prices will have a bearing on the cost of production and could lead to lesser profit margins.

“On the other hand, with the recent devaluations, Sri Lanka Tea prices have shown a steady rise from all elevations exceeding last years corresponding sales, but remain below in US dollar terms” added the Tea broker’s weekly market report.

The broker observes that this demand has been created partly due to the drop in world black tea production during the first quarter of this year.