Tea production and prices leaving much to be desired
By Steve A. Morrell
Brokers’ comparative analysis of tea production in Sri Lanka for January 2024 and January 2023 did not yield any noteworthy and positive statistics that merit elaborate commentary.
Year 2023 ended with a production of some 256 million Kgs, with 2021 recording around 299 million Kgs. Data gleaned from the Asia Siyaka Weekly Tea Market Report last week revealed these comparative results.
Auction prices during last week did not indicate any substantial improvements either.
Forbes and Walker Tea Market Report said, however, that prices improved as the auction proceeded with improved selection coming from Nuwara Eliya and Uva Udapussellawa. Such selections broke the trend of unsold volumes. Better teas gained Rs.50 to Rs. 70 per kilo.
The declining trend in prices was attributable to perhaps the instability of Sri Lankan rupee and the turbulence in money markets.
Ex- estate offerings totaled around 0.72 million Kgs for the week, reflecting dependence among the smallholder sector.
Tea factory owners informed us that some factories pay as much as Rs, 300 for each kilo of green leaf supplied by smallholders. Some smallholders informed us that holdings of around 10 to15 hectares generated substantial profits.
Private factory owners were of the view that their enterprises generated profits. These views were voiced by smallholders in the low country as well as those in the central hills as well.
Of the 4.6 million Kgs on offer, low growns accounted for 2.10 million kgs. Low production trends were not unusual during this time of year because of drought conditions in the western hills. Factory owners were confident that March / April showers will result in crop rejuvenation.
Asia Siyaka weekly Tea Report also indicated that the Sri Lanka Tea Board had confirmed that production for January this year was 19.1 million kgs. However this figure was eventually revised to 18.4 million kgs.
The January 2024 production gain was primarily from the low grown sector. High growns declined from 3.6 to 2.5 million kgs.
Shippers to Iran were less active last week although fair demand was recorded by shippers to CIS countries and Turkiye.
