Tea, Sri Lanka’s third largest foreign exchange (FX) earner saw earnings fall by 13.67 per cent (US$ 57,370,501) to US$ 362,426,621 Year-on-Year (YoY) in the first four months of the year, Forbes & Walker Tea Brokers data released on Friday (20 May) showed.
The fall in tea earnings is due to two reasons. They are both the decline in tea export volumes as well as in prices, YoY in the review period. Tea export volumes in the first four months of the year decreased by 4.88 per cent (4.2 million kilos) YoY to 82 million kgs, while tea prices in the review period decreased by 9.24 per cent (US$ 0.45) to 4.42 per kg, Free on Board (FOB).
Fall in tea export volumes was contributed by the fall in tea production. Tea production in the first four months of the year fell by 17.52 per cent (18.31 million kgs) YoY to 86.23 million kgs.
The chief reason for the decline in tea production was President Nandasena Gotabaya Rajapaksa banning the import of chemical fertiliser, weedicides and fungicides for a seven-month period from April 2021 to November. This ban was subsequently rescinded, but too late to undo the damage caused.
And the reason for the fall in tea prices, sanctions on Russia by the global community, one of Sri Lanka’s top tea importers, due to its invasion of Ukraine and sanctions also on Iran, due to its nuclear programme. However, sanctions on Iran are currently being phased out, if not being completely lifted, due to it falling in line to be accommodative of the international community’s concerns.
By Paneetha Ameresekere