June tea production plunges; brings 1H output to lowest levels in years

By Shabiya Ali Ahlam
Sri Lanka’s tea industry continues to move along a negative growth trajectory with dampened production in June dragging the 1H16 output to the lowest levels witnessed in years.

Confirmed figures from the Sri Lanka Tea Board (SLTB) released yesterday showed tea production in June had declined to 25.3 million kg from 29.5 million kg in the corresponding month of 2015, showing a 14 percent year-on-year (YoY) decrease. Sri Lanka’s monthly tea crop has been in a YoY decline for five consecutive months starting February and shows no sign of improvement.

 Tea production kicked off with a positive in the beginning of the year with the output in January recording an 8 percent YoY growth.Analysis of the January-June cumulative crop figures for the year show the production dipped 11 percent to 153.8 million kg from 172.9 million kg YoY.  

According to industry stakeholders, the first six months’ production is the lowest since 2009 when a combination of severe drought and market crisis curtailed production sharply.

A report by Asia Siyaka attributed the dip in output to continued poor weather conditions and deferred agricultural practices that restricted tea production, particularly in the 
high grown areas.

“Conditions have not improved significantly in July and Sri Lanka will be hard pressed to achieve last year’s figure of 26 million kg in July,” Asia Siyaka said, opining that the grim situation is likely to continue for the coming months.

It is noted that the increasing prices have not compensated for a sharp rise of costs in the estate sector. However, for smallholders, the higher auction averages have ensured improved green leaf prices.

According to Asia Siyaka, the challenges of controlling weeds, applying fertilizers and maintaining other necessary agricultural practices will remain.