Tea earnings drop by USD 56.21M

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Tea export earnings in the first  eight months  of the year declined by 6.31 per cent (USD 56.21 million) to USD 834.79 million (fob) year on year (YoY) and export volumes were down by 9.65 per cent (16.51 million kilos) to 171.06 million kg in the same period, Forbes and Walker Tea Brokers data released on Wednesday (14) showed.

However, tea export prices gained for the fourth consecutive month to last month (August 2022), aided by high oil prices,accelerating by 2.74 per cent (USD 0.13) to average at USD 4.88 per kg (“free on board” (fob)) in the reviewed eight-month period, compared to a flat YoY growth experienced in the first seven months of the year.Tea prices move in relation to oil prices. When oil prices rise, tea prices increase, but when oil prices fall, tea prices also decline.

Consequently, the “fob” price of a kg of tea accelerated by 14.47 per cent (USD 0.82) to USD 5.45 per kg (fob), YoY last month, compared to a slower rate of growth, 14.47 per cent to USD 5.22 per kg (fob), YoY, witnessed in the previous month July 2022.

However, tea export volumes fell for the fourth consecutive month to last month, scarred by President Gotabaya Rajapaksa’s six-month chemical fertiliser export ban from April 2021 to November 2021, declining by 10.76 per cent (2.48 million kg) YoY to 23.01 million kg last month.

Nonetheless, tea export earnings gained for the third consecutive month last month despite a drop in export volumes, accelerating by 6.28 per cent (USD 7.41 million) to USD 125 million, YoY, compared to a slower growth rate of 1.99 per cent (USD 2.32 million) to USD 118.79 million,YoY, witnessed in July 2022.

Howbeit, tea export earnings in the first  eight months  of the year declined by 6.31 per cent (USD 56.21 million) to USD 834.79 million (fob) YoY and export volumes were down by 9.65 per cent (16.51 million kg) to 171.06 million kg. 

Tea export earnings were 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.

According to Forbes, Iraq remained the No. 1 major importer of Sri Lanka tea with an increase of 31 per cent in imports YoY for January-August 2022. Russia secured second position with a total of 14.98 million kg, which, however isa 19 per cent decrease against total imports recorded for January-August 2021. UAE sits in third place with a total of 14.78 million kg followed by Türkiye, Iran, Azerbaijan and Libya respectively during the period January-August 2022.  Howbeit, a significant decrease in imports is reported from Türkiye (58 per cent), China (20 per cent), Syria (23 per cent), Japan(12 per cent) and Jordon (21 per cent) is seen YoY. “A notable increase in imports is recorded from Azerbaijan (seven per cent), Germany (eight per cent), USA (seven per cent), Saudi Arabia (four per cent) and Poland (15 per cent) YoY, was also seen, it said.

“Fob” means the price of the goods when boarded in a vessel for export at the exporter’s port. “Cif” or “cost, insurance, freight” means the price of goods, after being received   at the importer’s port.

BY Paneetha Ameresekere