Sri Lanka tea production last year fell to a four-year low of 300 million kilos, but export revenue set a $1.33 billion record.
Sri Lanka Tea Exporters Association Chairman Sanjaya Herath said that export revenue grew by $50 million (SRs8.9 billion) despite the fact that volume was down from 2018.
Sri Lanka is developing a 10-year strategic plan to make the country more successful in the highly competitive market for black tea. The Ministry of Plantation Industries and the Colombo Tea Traders Assoc. are working on two strategy documents.
The first examines tea industry issues from the grower level to the end customer. A second review focuses on international demand for Ceylon tea. Many feel that the emphasis should be on quality over quantity. Setting an export target of 250 million kilos of better-quality tea could result in higher profits. Others say that a target of 350 million kilos is more efficient as it allows the country's many tea factories to operate near capacity.
Herath noted that export volume globally is expected to remain at high levels (estimated at 1.8 billion kilos), a surplus that drives down prices. Rajesh Gupta, compiler of the Global Tea Digest, estimates black tea output grew 1% to 2.3 billion kilos in 2019.
In its annual report exporter Asiya Siyaka, “Last year we were optimistic that Sri Lanka’s tea production could show a partial recovery in 2019, but that was not so. Low auction prices had both the farmer and plantation company running at a loss most of the time and could have led to reduced fertilizer application.”
Kenya and India also complained of low prices. Production of black tea was down 7% in Kenya, Malawi was off 4.5%, but India's tea production increased 3.8% to a record 1,390 million kilos.
All three countries are worried that 2020 will present additional difficulties as forecasters predict an El Nino. Unusually hot seas in the equatorial Pacific region near Peru often wreak havoc in Africa and Asia.
- Dan Bolton