Sri Lanka’s tea export volumes, earnings fall in August

ECONOMYNEXT – Sri Lanka’s tea export volumes and earnings fell in August 2018 from a year ago, largely owing to lower prices and reduced demand in key West Asian markets, particularly Iran, brokers said.

Tea export shipments fell 3.8 percent to 23.9 million kilos in August 2018 from a year ago with earnings down 1.5 billion rupees or 7.5 percent to 18.6 billion rupees.

The FOB (free on board) value per kilo fell over 30 rupees to 780.19 rupees from 810.93 rupees in August 2017.

“The volume of tea exports for the first eight months of the year has decreased by a substantial 3.5 million kilos,” brokers John Keells Plc said.

Iraq has emerged as the leading importer of Sri Lankan tea with other major importers being Turkey, Russia, Iran and United Arab Emirates.

Asia Siyaka Commodities said the declining trend began in May when monthly quantities shipped fell compared with 2017.

“Following this slide, the cumulative export quantity for the period January – August has dropped to 186.6 million kilos against 190.1 million kilos a year ago,” the brokers said in a report.

While the rupee value of exports held steady at 152 billion rupees, identical to a year ago, in US dollars, tea export earnings dropped to 970 million dollars in January – August 2018 from one billion dollars in the same period in 2017.

The approximate FOB value per kilo slipped to 5.20 dollars from 5.27 dollars a year ago.

Shipments to Iran, the fourth biggest importer of Ceylon tea, follows, fell to 14.5 million kilos from 17.8 million kilos during this period.

The UAE, the fifth biggest importer, as a transit point handled a smaller quantity of 7.6 million kilos against 10.9 million kilos the year before.

“This is a 30% drop and reflects the restrictions imposed on trade with Iran,” Asia Siyaka Commodities said.

Libyan imports also fell, to 7.4 million kilos from 8.7 million kilos the year before.

But tea shipments to Syria recovered with quantities rising a sharp 44 percent to 6.7 million kilos this year from 4.6 million kilos last year.
(COLOMBO, 01 October, 2018)