Sri Lanka’s tea prices rise sharply in July establishing record National Sales Averages.
Daily FT: In the backdrop of declining volumes, tea prices are on the rise sharply with July establishing record National Sales Averages both in rupee and dollar terms. Forbes and Walker Tea Brokers said in July, as well as year to date, all elevations have recorded significant gains. For example, the total auction average of Rs. 1,448.13 per kilo, the High grown average of Rs. 1,204.57 per kilo, Medium grown average of Rs. 1,152.29 per kilo and Low grown average of Rs. 1,608.57 were the highest ever.
Sri Lanka’s tea crop in June declined by six million kilos or 23% to 20.15 million kilos with all elevations recording declines year-on-year. In the first half the crop was down by 18% to 133 million kilos.
Forbes said the national Tea Sales Average (TSA) for the month of July 2022 recorded Rs. 1,448.13 ($ 4.05) was the highest ever recorded average for a calendar month surpassing the previous best of Rs. 1,333.61 ($ 4.14) achieved in April 2022.
In comparison to the July 2021 average of Rs. 591.35 ($ 2.99), the TSA shows a significant increase of Rs. 856.78 YoY whilst gaining 1.06 in dollar terms as well.
In dollar terms, the July 2022 average of $ 4.05 is an increase of $ 0.56 when compared to the June 2022 average of $ 3.49.
Forbes, giving a breakdown of highest ever elevational averages for July, said High Grown average of Rs. 1,204.57 ($ 3.37) reflected an increase of Rs. 192.50 month on month vis-à-vis Rs. 1,012.07 ($ 2.83) of June 2022. When compared to the July 2021 average of Rs. 555.26 ($ 2.81), the rise was a significant Rs. 649.31 YoY, whilst in dollar terms it was $ 0.56.
The highest ever Medium Grown average for a calendar month totalling Rs. 1,152.29 ($ 3.23) for July 2022 was an increase of Rs. 159.90 month on month vis-à-vis Rs. 992.39 ($ 2.78) of June 2022. When compared to the July 2021 average of Rs. 521.70 ($ 2.64), it is also a significant increase of Rs. 630.59 Y-o-Y, whilst in dollar terms it was $ 0.59.
Low Grown’s too recorded the highest ever average of Rs. 1,608.57 ($ 4.50) in July 2022 surpassing the previous best of Rs. 1,506.71 ($ 4.22) recorded in May 2022. It records an increase of Rs. 178.09 month on month and a significant Rs. 982.35 YoY respectively with a gain of $ 1.33 in dollar terms.
Forbes also said all elevations recorded significant gains during the period of January-July 2022 when compared to the corresponding period of 2021, both in rupee and dollar terms.
Sri Lanka’s tea industry has shown a growth momentum, especially in tea sales as the industry is focused on Ceylon Tea regaining its top slot in the international market. Ceylon Tea was also named the official tea for the 2022 Commonwealth Games held at Birmingham in the UK, which is indicative of the global recognition of tea produced in Sri Lanka. Also, the many trade agreements as well as trade concessions enjoyed by the country and the many incentive schemes office by the local authorities to uplift Sri Lanka’s tea industry have helped boost the local tea industry along with its exports. Given the growth momentum in the local tea industry and it’s growing business potential, foreign businesses/investors could explore the opportunities in the industry while also looking at the possibility of forming partnerships or joint ventures with local businesses engaged in the tea industry.
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