Ceylon Tea prices rebound amid Middle East ceasefire hopes
The Morning: Ceylon Tea prices rebounded by approximately Rs. 100 at last week’s auction, amid optimism surrounding a potential resolution to hostilities in the Middle East, the Sri Lanka Tea Board (SLTB) reveals.
Speaking to The Sunday Morning Business, SLTB Chairman Rajpal Obeyesekere revealed that in the aftermath of the announcement of the cessation of hostilities between Israel and Iran, prices of Ceylon Tea had rebounded to pre-crisis levels.
He further noted that little to no discernible impact had been observed at last week’s auction from the preceding development.
Obeyesekere added: “There was a dip in price of about Rs. 100 in the previous week, accompanied by some withdrawals. This week, the prices in the market have returned to normal; in particular, there was no discounting in the types [of tea] going to Iran.”
He further revealed that this week’s auction had witnessed fair demand, with approximately 6 million kg sold and no withdrawals recorded, as the entire offering had been successfully cleared.
Accordingly, he expressed hope that conditions would fully normalise, provided the current positive developments in the external market continued.
Obeyesekere further acknowledged that insurance companies were still withholding coverage for goods destined for the conflict region, but expressed confidence that such coverage would resume in the near future.
He pointed out that tea production was up 9.15% Year-on-Year (YoY) during the first five months of 2025, with 113.96 million kg produced up to May 2025 compared to the 104.8 million kg produced during the equivalent period in 2024.
OSL take:
Ceylon Tea, which was the top tea brand in the global market in the past, is once again on the path to regaining the top slot. Tea and tea based products are key export commodities of Sri Lanka generating a considerable amount of revenue to the Sri Lankan coffers. Sri Lankan authorities are also focused on further uplifting and expanding the country’s tea industry to meet the increasing demand in the global markets for tea and tea based products. While the many trade agreements and trade concessions enjoyed by Sri Lanka with many foreign countries have helped boost Sri Lanka’s tea industry, local authorities are also carrying out many promotional campaigns in new and old foreign markets as well as encourage local businesses to add more value to the tea and tea based products and further diversify their tea and tea-based product portfolio to fit the increasing demand in the global markets. All these factors have resulted in the expansion of business/investment opportunities in Sri Lanka’s tea industry. The many business/investment opportunities in the tea industry are manifold and range from direct to indirect ventures. With the acceptance of Sri Lanka’s tea and tea-based products as high quality products in foreign markets with increasing prices in the markets as well, the growth and business potential of the local tea industry present many lucrative business ventures to foreign businesses/investors.
| Article Code : | VBS/AT/20250702/Z_2 |