Sri Lankan RTD beverage exports, supported by Dilmah’s popular iced tea products, grew by 540% in 2025, making the country a new leading player in the re-export market. Photo credit: Dilmah
The Sri Lankan tea export sector is undergoing a structural transformation. While traditional bulk and packet tea volumes have generally softened, the remarkable rise in re-exports and the emergence of RTD tea suggest that Sri Lanka is evolving from primarily being a tea-producing country into a broader regional hub for tea processing, blending, branding, and export.
According to the Sri Lanka Tea Board, exports of small packets weighing 10kg or less peaked at approximately 113,800 tons, while re-export volume more than doubled from approximately 9.87 million kg in 2021 to approximately 19.9 million kg in 2025, demonstrating Sri Lanka's emergence as a global tea hub. The RTD beverage export also experienced massive growth, reaching 130,931 liters in 2025, up 540% year-on-year (YOY).
The country’s total tea export value reached a record level of $1.5 billion in 2025, up 5% year-on-year. Compared with 2021, export volume decreased, but export value increased by 14%, supported by stronger prices. In terms of export volumes, packets account for the largest share (44.2%), followed by bulk (40.4%), re-exports (7.7%), and bags (7.5%).
Iraq maintained its top import position for the third consecutive year, following 2023 and 2024, with approximately 39.4 million kg (15.3% share). This was followed by Russia (8.4%), Turkey (8.3%), Libya (7.4%), the UAE (7.1%), Chile (4.3%), China (4.0%), Iran (4.0%), Azerbaijan (3.5%), and Saudi Arabia (3.4%).
In 2025, Sri Lanka's total tea production reached approximately 264,616 tons, with Highland Quality (HGQ) accounting for 21%, Middleland Quality (MGQ) 18%, and Lowland Quality (LGQ) 61%. On the global export front, the country is the third-largest tea exporter, with approximately 50% of its tea exported in value-added form.
Sri Lankan RTD tea exporters are increasingly targeting Gulf Cooperation Council countries, Japan, South Korea, Australia, and premium retail chains in Europe. The key export players are Dilmah Ceylon Tea Company Plc, Akbar Brothers Pvt Ltd, Empire Teas, Anverally & Sons, and Stassen Group.
Today, Dilmah stands as Sri Lanka's largest foreign-exchange earner in value-added teas. Dilmah’s vertically integrated model enables the creation of unique offerings such as single-estate teas, seasonal teas, and RTD iced teas. To support the growth of its RTD segment, Dilmah partners with specialized beverage companies that possess the expertise and distribution infrastructure required for this niche.
Dilmah’s RTD tea sales showed 40% YOY growth in 2025. Dilmah Craft Iced Tea is the original iced tea produced using Ceylon tea. Since its launch in 2021, it has quickly become a leader in the global craft iced tea category and is currently available in more than 25 countries.
At the same time, the government is working to restructure its smallholder tea sector through a large-scale “Ceylon Tea Village” program aimed at boosting productivity, value addition, and export earnings, while repositioning the industry towards a $2.5 billion annual export target by 2030.
Plantations and Community Infrastructure Minister Samantha Vidyarathna said that the initiative to build 500 cluster tea villages nationwide will be key to lifting finished tea production to 400 million kg, while improving farmers' incomes and strengthening the country’s global positioning in premium tea markets.
The program, implemented through the Tea Small Holders Development Authority, Sri Lanka Tea Board, Tea Research Institute, and National Plantation Management Institute, will commence in 2026 in 144 tea villages across 14 districts, with an official launch scheduled for July 15.
It envisions creating a nationwide network of integrated agro-industrial clusters. Each cluster village would function as a dynamic local economic hub linking farmers, processors, research institutions, logistics providers, and export markets within a coordinated ecosystem.