Production loss in Sri Lanka buoys demand for Indian tea

By Steve A. Morrell.

Over the past few weeks, tea circles were abuzz on a rising trend of Indian teas being preferred to Ceylon Tea. Our enquiries supported by tea broker reports revealed that there is currently a drop in the production of Ceylon Tea. Because of this loss in production of our teas, buyers were moving to other suppliers.

Particularly the demand for orthodox tea is dropping. As a result, buyers are switching to Indian producers.

Asia Siyaka (AS) tea brokers said last week in a report authored by its president Anil Cooke that orthodox tea prices in India had started firming up and were expected to maintain an upward trend. However, CTC and Crush Tear Curl largely witnessed a softening trend.

Comparative production trends as indicated in the AS report were that todate production in 2022 recorded 126.7 million kilos (Ks), same date 2021 production was 155.2 million Ks, indicating a drop in production of a minus variant of approximately 28 . 2 million Ks. The comparative minus trend was exacerbated by the weekly performance at auction offerings of about 1 million kilos in a deficit equation.

However, although buyers were reported to move to Indian teas, Ceylon Tea was not ignored in the weekly auctions. Price averages continued to rise.

Egyptian Packers maintained strong interest with good enquiry from Pakistan and Yemen. Other Middle East countries, Kazakhstan, CIS states and UK, lent more support. Afghanistan showed reduced enquiry. The report said that Russia was absent with Iran too not active at the auction last week.

Prices for all elevations showed marked increases with low growns recording highest prices, selling at averages of about Rs. 1645 per kilo.

Market trends for Sri Lanka Tea, for example, to the US were that such teas occupied 5th position, behind Argentina, India, Malawi, China. Sri Lanka exports to the US was 7.6 per cent or 865 MTs (metric tons). Argentina, exported 4662 Mts. to the US.

Annual production since 2017 shows marked reduction. 2017 production was 307.71 million Ks, 2021 production was 299.48 million Ks.