Tea production down 16.18%

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Tea production, hit by President Gotabaya Rajapaksa’s ban on chemical fertiliser imports, fell by 16.18 per cent (34.11 million kgs) to 176.69 million kilos in the eight consecutive months to last month (May 2022) Year-on-Year (YoY), Forbes & Walker Tea Brokers’ data released on 22 June showed.

This ban imposed in April last year (2021) was subsequently rescinded by Rajapaksa seven months later in November last year (2021), but too late to reverse the damage caused to the industry. Tea export was Sri Lanka’s third largest foreign exchange (FX) earner for two consecutive years to last year (2021), Central Bank of Sri Lanka (CBSL) data showed.

Consequently, total tea export revenue fell for the fifth consecutive calendar month to last month by 14.03 per cent (US$ 74.53 million) to US$ 456,717,686 Free on Board (FOB) YoY and export volumes declined by 7.52 per cent (8.27 million kgs) to 101.72 million kgs.

FOB in this instance means FOB Colombo, which only takes into account the cost of tea volumes, including its value, shipped to Colombo to a vessel for export, but doesn’t take into account other costs such as the insurance and freight costs of shipment, known by the phrase ‘cost, insurance, and freight’ (CIF).

By Paneetha Ameresekere