AMIDST CHALLENGING CONDITIONS,
CEYLON TEA CONTINUES TO BREW POSITIVELY
The Sri Lanka Tea Board (SLTB) as the apex regulatory and administrative body for the industry, organised a Media Conference recently to discuss the industry’s performance, resilience, and future agenda.
Celebrated as among the finest teas for its unique flavour, fragrance and freshness, the Ceylon Tea aroma, in existence for over 155 years, and though amidst severe challenges, continues to capture the world, brewing positively.
During its golden days, tea production reached an all time high with a record of 340 million Kgs in 2013. After short increases during the period 2017 to 2019, tea production recorded a decrease in year 2020, mainly due to the fallout from the pandemic.
With all stakeholders within the industry – growers, manufacturers, producers, brokers, and exporters facing obstacles, output has continued to dip. However, the industry’s contribution to national output cannot be underestimated, and its resilience and revival are crucial for the country’s economic, social, and political stability, to shore up external finances and for the country’s economic development.
Due to the depreciation of the rupee against the dollar, during the first half of the year, and a shortage of tea, sales caught up, and Auction Prices increased sharply since March 2022.
Despite fuel shortages and logistic issues, the Regional Plantation Companies and smallholders have been able to continue the harvesting of green leaf throughout the year. When compared to 2020 and 2021 volumes, the Green Leaf price to smallholders have increased exponentially from July 2022 onwards. In the low grown sector, smallholders have been enjoying prices ranging between Rs. 265 – 300 per Kg compared to Rs. 90 from about 2 to 3 years before.
The last few months has shown much needed respite for the industry. Monthly Auction and FOB prices from August to October have continued to increase while in October the highest FOB price of 5.72 US$/Kg was recorded.
Elaborating on its future direction, Niraj de Mel, Chairman of the Tea Board noted that SLTB is forecasting a modest growth for 2023 in comparison to the current year. For 2023, estimated production is 290 million Kgs with export revenues expected to increase to USD 1.4 Billion.
With the SLTB reviewing market conditions and changes proactively, it is seeking innovative avenues to preserve Ceylon Tea’s reputation for quality, while benefitting all stakeholders. During the event, Tea Sector Development Projects with an emphasis on the B-60 Program were elaborated and the Promotional and Marketing Agenda for 2023 was also unveiled.