Sri Lanka tea to achieve the export target of US $1.5 billion this year
View(s):Sri Lanka had an extraordinary year with prices for Ceylon tea moving on their own and seemingly out-of sync with the rest of the world. Sri Lanka’s unique range of orthodox black teas attracted strong demand throughout the year; even as some of the county’s key markets such as Iran, Syria and Libya were in turmoil. Additionally Egypt a major buyer of African Black Teas went through a bad patch politically and economically. High supply and slow demand saw prices at the Mombasa auction in Kenya, slump to a four year low Siyaka Research market review 2013, revealed.
Available data for November analysed by Siyaka Research suggests that Sri Lanka will achieve the country’s tea export USD earning target of US $1.5 billion in 2013. By November the country had exported 290.6 million kg of tea and earned US $1.40 billion.
Final figures for the year therefore would be close to 320 million kg at an approx. USD value of $1.54 billion . In 2011 the country earned US$1.49 billion and in 2012 the figure was US$1.40 billion making 2013 USD earnings the highest ever. In SL Rupees the income figure would be in the region of Rs. 197 billion . Well above the 2012 figure Rs. 164 billion Siyaka Research said.
Though figures indicate a good year for tea production, the lack of predictability of distribution monthly, has resulted from extremes of weather. The unprecedented heavy rains and overcast conditions from mid-May to July restricted Supply from the Western slopes of the Central hills and from some Low Grown areas. This unpredictability will be a key determinant throughout 2014; even as the dry Western quality season sets in during Q1 2014, Siyaka Research disclosed.
Some important tea consuming countries are likely to continue unsettled in 2014. Syria a 90% Ceylon tea market whose imports peaked at 32 million kg will see direct imports drop well below 23million kg in 2013 and could slide further. Libya similarly a market dominated by Ceylon’s’ had imports drop30% in 2013. Iran one of Sri Lanka’s most important markets had direct imports to the country decline 20% in 2013. Easing of sanctions and strengthening of the Iranian currency would at least sustain demand through 2014, Siyaka Research said.
In Colombo there was a strengthening of demand for tea from other Middle Eastern and North African countries and projections are that this demand would continue in 2014, Siyaka Research said.
The market for Ceylon Orthodox Leafy Black teas particularly from the Low Grown segment that closed 2013 on a high note will see demand sustained through Q1 2014.
The market for High Growns though enjoying additional demand from the pure Ceylon Tea brands and international packers loyal to Ceylon tea, is more vulnerable to Global price trends at the lower level of quality where cheaper other origin substitutes are available. Siyaka Research predicted.