Performance of tea industry in 2022 up to Nov. and prospects for end of 2022

by Pavithri Peiris

Year 2022 began with a lot of optimism. Monthly auction average prices continuously increased and more sharply from April. However, as anticipated, the crop shortfall was inevitable due to the fertilizer crisis. As the year progressed, the Sri Lankan tea industry faced numerous challenges.

Subsequent to the banning of Chemical fertilizer by the Government of Sri Lanka in 2021, tea growers and large plantations, in particular, were forced to only use organic fertilizer which too was not adequately available resulting in a negative impact on the Tea production. A drop of 17% compared to the previous year has been recorded up to end November 2022. The forecast for 2022 with just one month remaining will be approximately 252 million kilos which would be one of the lowest.

With the Government’s decision to allow a more generous policy on fertilizer, all expectations are that the country’s tea production in 2023 would improve to at least 290 million kilos. It is believed that the initiative re-launched jointly by the Sri Lanka Tea Board and Tea Small Holdings Development Authority’s titled B 60 or “Sahakampanaya” in September this year would contribute favourably towards achieving a higher crop. The objective of this program is to increase the intake of better green leaf which will also help growers and plantations to return to 4 plucking rounds per month from the present 2 rounds. The drawback however is the shortage of tea pickers which area will have to be addressed soon. Expectation of an increase in production next year is however subject to the weather conditions remaining conducive for growth throughout the year 2023. Ageing tea bushes and low productivity levels could also act as a downside.

Made tea production for the year up to end November was 231.87 million Kgs. This is significantly lower compared to 278.96 million Kgs recorded for the same period in 2021. It is also lower than 250.19 million Kgs produced during the corresponding period in 2020. Out of the total production for 2022, the Smallholder sector output was 174.71million kgs (75%) while the RPC sector accounted fo 75.8 million kgs (33 %). Both sectors recorded decreased outputs with the greatest decline of 20 % being registered from the RPC sector. The production shortfall in the small holding sector was 16%.