Tea revenue tops Rs. 110 Bn in 1Q

Year 2024 commenced on an encouraging note in keeping with the momentum of the previous year due to the increase in value across all elevations, despite a moderate level of crop intake/production during the period under review, said Forbes and Walker bi-annual issue Tea review 2024.

Revenue from tea exports for Q1 was Rs. 110.91 billion, which is a Rs. 0.69 billion increase year-on-year, in comparison with the January-March 2023 earnings of Rs. 110.22 billion. The second quarter auction prices witnessed an increase of approximately 16% having recorded a Sale Average of Rs. 1,243.53 vis-à-vis Rs. 1,069.84 in the corresponding period of 2023.

This was mainly due to the lower to moderate production in the given period. Exports: Revenue earnings for Q2 witnessed a significant increase in comparison with previous year’s figure of Rs. 99.70 billion, against April-June 2024 of Rs. 110.04 billion. The comparative increase in freight charges in other tea producing regions against Sri Lanka, witnessed improved demand mostly from the Middle East and Euro-Asian sectors. Russia, the world’s largest tea importer, is likely to be impacted by the sanctions and consequently, constrained demand throughout the period under review.

Similarly, and yet another market, would be Türkiye which accounts for 5%-6% of global consumption and a significant player in the Sri Lankan tea market. These factors coincide with large volumes of tea remaining unsold from the African Region and it would be reasonable to predict that such teas are of plainer/poor quality. In such circumstances, the availability of good quality teas globally as a percentage would remain low and therefore, in the medium to longer term prices for such teas will most often command a notable premium.

Other factors for consideration would be consumers increasingly seeking teas which are ethically sourced, grown without harmful chemicals and packaged in environmentally-friendly packaging. Global demand for black tea will continue to rise, however demand for Green tea and organic teas with greater reported health benefits will surpass the growth demand for black tea.

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