Ceylon Tea value continues to soar with August recording highest ever FOB in dollars and rupees.
Daily FT: Value for Ceylon tea continues to soar with August recording the highest ever Free On Board (FOB) both in dollars and rupees.
Forbes and Walker Tea Brokers said the FOB value of Rs. 1,951.82 in August 2022 records the highest ever in a calendar month, surpassing the previous best of Rs. 1,863.74 achieved in July. The FOB value has seen an increase of Rs. 1,034.62 compared to Rs. 917.20 of August 2021 and in USD terms a gain of 0.82. In the first eight months of 2022, the FOB value of Rs. 1,470.54 reflects an increase of Rs. 543.33 per kilo as against Rs. 927.21 in the corresponding period of last year.
Asia Siyaka Commodities PLC said the FOB value per kilo in August was $ 5.41, the highest in more than 20 years. Last year FOB value for August was $ 4.55 and the previous record $ 5.29 in 2017. It said considering that there has been no significant improvement in value addition, while freight rates remain high, global black tea supply situation remains largely unchanged, this FOB rate primarily results from a spike in tea auction prices driven by a sharp drop in quantities available for sale in Sri Lanka.
In August, tea exports amounted to 23 million kilos, down by 2.47 million kilos from a year ago. In the first eight months exports totalled 171.06 million kilos down by 16.51 million kilos or 8.8% from the corresponding period of last year. All categories have witnessed a decline in comparison with the corresponding period of 2021, Forbes said.
Value wise the country earned $ 819 million in the first eight months down by 7% from a year ago and it is the lowest since 2008.
Forbes said Iraq has remained the number one major importer of Ceylon Tea with an increase of 31% in imports YoY for January-August 2022. Russia has secured second position with a total of 14.98 million kilos, which is a 19% decrease against total imports recorded for January-August 2021.
UAE sits in third place with a total of 14.78 million kilos followed by Turkey, Iran, Azerbaijan and Libya respectively during the period January-August 2022. A significant decrease in imports is reported from Turkey (58%), China (20%), Syria (23%), Japan (12%) and Jordan (21%) YoY.
Forbes also said a notable increase in imports is recorded from Azerbaijan (7%), Germany (8%), USA (7%), Saudi Arabia (4%) and Poland (15%) YoY as expanding markets for ‘Ceylon Tea’.
The steady increase in the prices fetched by Ceylon Tea is indicative of the overall growth in Sri Lanka’s tea industry. Sri Lanka’s authorities are focused on developing and uplifting the country’s tea industry in order to regain the top slot held by Ceylon Tea in the international market for years. The government of Sri Lanka has also introduced many incentives to further promote the country’s tea industry. The many trade agreements as well as trade concessions enjoyed by the country have also helped boost Sri Lanka’s tea industry. The steady growth in the tea industry and the increasing prices of tea produced in the country have opened up business/investment opportunities in Sri Lanka’s tea industry for foreign businesses/investors. The foreign businesses/investors could also look at forming partnerships or joint ventures with local businesses engaged in the tea industry for further expansion.
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