Sri Lanka’s tea exports volume increases by 14% in October
Daily FT: Sri Lanka’s tea exports in October have increased by 14% year-on-year (YoY) whilst value-wise, the growth was subdued.
Asia Siyaka Commodities PLC said tea export quantities in October amounted to 20.7 million kilos (Mnkg), reflecting a 14% increase from a year ago. With this gain, exports volume in the first 10 months has grown by 3.4 Mnkg YoY to 203.1 Mnkg.
“Despite the strengthening of the Sri Lankan Rupee, earnings have risen to Rs. 360.5 billion compared to Rs. 354.9 billion last year. This converts to an approximate $ 1.186 billion against $ 1.087 billion by end October 2023. These higher Dollar earnings have come not just from a greater quantity exported but from a stronger FOB per kilo of $ 5.84 against $ 5.45 the year before,” Asia Siyaka added.
It said tea exports in Value-Added form, which considers all exports other than those in Bulk form, have declined to a 16-year low. This is largely due to a drop of 8% in the Tea in Packets category whilst Bulk Tea exports have grown 9% YoY. A positive aspect of the Value-Added segment is the sharp rise of the Tea Bag sector, which has grown 11% from 18.9 Mnkg to 21.1 Mnkg. The high-value Instant Tea segment is up 22% YoY 2023 to 2.3 Mnkg.
A review of the main destinations for exports of Ceylon tea has Iraq topping the list with a quantity of 27.1 Mnkg, down 4% on last year’s figure of 28 Mnkg. Russia follows with 20.6 Mnkg with a positive change of 8%. The UAE, a major transshipment market, is up from 14.7 Mnkg to 18.7 Mnkg.
In contrast, direct exports to Turkey have crashed from 25.5 Mnkg to 14.7 Mnkg. China has maintained its volume with 9.6 Mnkg and is followed by Azerbaijan with 8.7 Mnkg, up 15% YoY. Iran, thanks to the oil debt for the tea deal, has grown significantly by 83% from 4.7 Mnkg to 8.7 Mnkg. The high-value Saudi market has grown 32% YoY to 7.4 Mnkg and is followed by Libya with 7.4 Mnkg, down 10%. Chile, with a quantity of 7 Mnkg, is up 11% on last year’s figure of 6.3 Mnkg.
Syria (6.4 Mnkg), Germany (5.6 Mnkg), USA (5.4 Mnkg), Japan (4.3 Mnkg), and Jordan (3.9 Mnkg) make up the next five destinations.
OSL take:
Sri Lanka’s tea industry is on a steady growth path with local tea authorities working towards Sri Lanka regaining the top slot once enjoyed by Ceylon Tea in the global market. The steady growth shown in tea export statistics indicate the growing business potential in Sri Lanka’s tea industry. The country’s many trade agreements as well as trade concessions have also helped boost Sri Lanka’s tea industry, especially tea exports. All these indicate an expansion in the business/investment opportunities in Sri Lanka’s tea industry. The Sri Lankan authorities have also proposed incentive schemes to attract foreign businesses/investors to the country’s tea industry while local export authorities have pushed local tea exporters to further diversify and expand the existing export product portfolio. Given the growing business potential in Sri Lanka’s tea industry, foreign businesses/investors could confidently explore the expanding business/investment opportunities in the industry while also looking at forming partnerships with local businesses in the tea industry with the aim of further expanding operations locally and internationally.
| Article Code : | VBS/AT/27112024/Z_4 |