Sri Lanka’s tea export market holds steady
The Morning: Sri Lanka’s tea export market is holding steady compared to the rest of the world, with improved performance at last week’s tea auctions as exporters to the Middle East adopted alternative routes for their shipments, according to the Sri Lanka Tea Board (SLTB).
Speaking to The Sunday Morning Business, SLTB Chairman Rajpal Obeyesekere said that the performance at last week’s local tea auction was very encouraging and represented a marked turnaround compared to the previous week.
He further stated that the unsold quantities at last week’s auction also showed a recovery, returning to normal levels of around 10–12%. In comparison, during the previous week, the unsold quantities had surged beyond normal levels.
“Last week there was a drop. This week there was no drop in prices and they remained constant compared to the previous week. Prices were averaging at acceptable levels. Also, withdrawals were averaging on par with normal withdrawal levels,” he stated.
Obeyesekere further stated that auction results during the previous week indicated that exporters had found alternate routes to transport their consignments to the Middle Eastern region.
Accordingly, he claimed that alternate routes had been identified to transport tea to destinations such as Iraq, Jordan, and Turkey.
He further revealed that certain tea varieties popular in the Middle Eastern region had seen a dip in prices of around Rs. 100 last week. While prices are yet to recover, they have stabilised at these levels this week, supported by improved buying interest.
OSL take:
The resilience shown by Sri Lanka’s tea industry despite external challenges posed by the ongoing conflict in the Middle East indicates the strength and growth potential of the industry as well as sectors related to it. Sri Lanka’s tea industry is growing with many business/investment opportunities opening up with local authorities working to further expand the export market for local tea through value additions and diversification of tea-based export product portfolio while also trying to regain the top slot enjoyed by Ceylon Tea in the international market in the past. Realizing the growing business potential in the tea industry, the Sri Lankan government has also introduced many incentives to businesses already in the industry as well as businesses looking at entering the industry. Given these positive developments, foreign businesses/investors could confidently explore the expanding business/investment opportunities in Sri Lanka’s tea industry and related sectors.