Export earnings down for sixth month by 12% to U.S.$ 581M

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Tea export earnings fell for the sixth consecutive month to last month (June 2022) and tea production for the seventh consecutive month to May 2022, scarred by President Gotabaya Rajapaksa’s imprudent decision of banning chemical fertiliser imports last year, though subsequently lifted, but too late to undo the damage already done.

Subsequently, tea export earnings last month declined by 6.69 per cent (USD 8.35 million) year on year (YoY) to $ 117.42 million (fob), Forbes and Walker Tea Brokers statistics released on Monday (11 July) showed.

Complementing this, tea export volumes fell by 12.63 per cent (3.41 million kilos) YoY to 23.58 million kgs last month.  However, the silver lining was that the price of tea increased by 6.87 per cent (USD 0.32) to USD 4.98 a kilo (fob),  YoY,  last month, recording its second consecutive monthly gain to last month.

Nonetheless, tea export earnings in the first six months (first half) of the year (2022) declined by 11.58 per  cent (USD76.15 million) to USD 581.35 (fob) YoY and export volumes down by 8.53 per cent (11.69 million kgs) to 125.29 million kgs.  In a further blow, average tea prices in the first six months of the year fell by 3.45 per cent (USD 0.16) to USD 4.64 per kg, YoY.

Meanwhile, tea production in May decreased by 15.11 per cent (4.7 million kgs) to 26.04 million kgs YoY and by 17.02 per cent (23.09 million kgs) to 112.56 million kgs in the first five months of the year, YoY, data showed. Due to the chemical fertilizer import ban, tea production has been falling since November 2021. Tea, according to the Central Bank of Sri Lanka, was the island’s third largest foreign exchange earner last year.

According to Forbes, Iraq emerged as the No. 1 major importer of Sri Lanka Tea in the first half of the year with an increase of 46 per cent year on year (YoY) in January-June 2022 to 23.51 million kilos. UAE secured second position with a total of 10.74 million kilos which is a four per cent increase against total imports recorded for January-June 2021.

Russia sits in 3rd place with a total of 10.10 M/Kgs followed by Türkiye, Azerbaijan, Iran and China respectively during the period January-June 2022.

A significant decrease in imports is reported from Russia (24 per cent), Türkiye (58 per cent), China (23 per cent), Syria (24 per cent) and Jordon (23 per cent) YoY, Forbes further said.

By Paneetha Ameresekere