Prices drop again, Ceylon Tea eyes China
Sri Lanka’s tea industry that was facing a sharp increase in prices is currently witnessing a drop due to higher volumes on offer and low quality at the Colombo auction.
Ceylon teas have seen a drop of Rs.50-70 per kilo at Monday’s auction with teas that were selling at Rs.620-660 coming come down to Rs.570-600. This has been attributed to the higher volume on offer and drop in quality due to seasonal changes in weather.
An overall crop production increase has been seen in tea producing countries like Africa, South India and North India due to the extended dry period with some rainfall causing a drop in price that is expected to continue until the next few weeks.
Tea prices were doing well in the wake of the El Nino drought that raised prices sharply due to low supply not just in Sri Lanka but also in Kenya, Africa and Asia.
Additionally the demand from the high growns increased based on low quantity but superior quality. In early January high grown production on offer was 800,000 kg that moved up in May to 1.6 million kg.
This week’s sale was 1.1 million kg of tea due to conditions in which the tea grown is considered to be part of the normal transition that takes place each year during this time of the year.
Due to the present conditions Sri Lanka is continuing to attract increased exports to new markets and in this respect the government is looking at making inroads to China. As a result, the government undertook a promotional drive in Beijing, China this year that has proved to generate increased interest from the market.
Another delegation is scheduled to attend another tea promotional event in China later this month and China’s Deputy Minister in charge of plantations had also met the Sri Lankan authorities in this regard during a visit to Colombo.
Sri Lanka is currently the leader in the Chinese tea market in respect of the imported tea segment pushing down Vietnam and India to second and third positions. And with China’s interest in black teas, Ceylon orthodox black teas are in a stronger position against the competition.
| 150 years later, Colombo tea auction in the cradle of tea – China | |
 Ceylon Specialty Estate Tea of the Year Competition underway in Beijing, China. Special guests watching the process include Sri Lankan Ambassador Dr. Karunasena Kodituwakku and Prof. Lubiao Zhang, Director General, Dept. of International Cooperation, China’s Ministry of Agriculture. Sri Lanka, to mark its 150th year of tea, recently organized week-long events in China “the cradle of tea civilization for more than 5,000 years” including a charity auction that raised RMB 145,900 (around Rs. 3.2 million). The proceeds are to be used for the welfare of Sri Lankan tea plantation workers. More than 150 participants from well-known tea enterprises, tea dealers, industry experts, tea scholars and connoisseurs, tea exhibitors and tea house/tea ship owners, journalists and media representatives took part in the events, according to the organisers. The Sri Lankan delegation alone comprised 65 state and private sector officials. While Scottish planter James Taylor established the first commercial plantation of tea in Sri Lanka (then Ceylon) in 1867, it was an Englishman who in 1824 took the Chinese “Camellia Sinensis” and produced a miracle beverage. The events were jointly organized by the Sri Lanka Tea Board the Colombo Tea Traders Association and the Embassy of Sri Lanka in Beijing in partnership with the Chinese counterparts. A Ceylon Specialty Estate Tea of the Year Competition, an award ceremony for the winning teas at a mega evening gala dinner, auctioning the award-winning teas for charity, a media conference, high level bilateral consultations and participation at the 9th Chinese International Tea Exhibition were some of events. A hand-picked panel of Chinese and Sri Lankan expert tea tasters judged the final round of the competition in Beijing. After a close competition, winners were picked under gold, silver and bronze for each category. On the following day, the award-winning Ceylon Teas were auctioned for the very first time in China. Five kg each of the winning teas were auctioned to Chinese buyers in a hotly contested bidding system. The preliminary rounds of the tea competition were held in Sri Lanka and 98 samples of the best teas under the seven main agro-climatic regions as well as Ceylon Green Teas, CTC Teas and Innovative Teas/Hand Made Teas were taken to China for the final. The grand finale was concluded at the National Agriculture Exhibition Centre in Beijing amid the 9th International Chinese Tea Exhibition. China is the world’s largest producer and consumer of tea and also the second biggest exporter of tea after Kenya. Between 2010 to 2016 period, the growth of Chinese tea exports to the world has been estimated at an annual 1.4 per cent while the annual increase of foreign tea imports to China during the same period has risen to 14.3 per cent. “This implies that, China is bound to import a larger volume of black tea during the years to come. Sri Lanka which exported only just over 1 million kg to China in 2010, has supplied 8 million in 2016. Further, Sri Lanka is the leader in the Chinese tea market in respect of the imported tea segment effectively relegating Vietnam and India to the second and third positions. Today, Sri Lanka’s share in Chinese tea imports has grown to 38 per cent by end of 2016 and optimism is high for a rapid rise,” the Sri Lankan organisers said in the media release.
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