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No revision to tea export target despite COVID-19 crisis

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  • Tea Board expresses confidence in industry stepping up to achieve US$ 1.3bn by year end
  • Says tea industry stakeholders doing what’s necessary to maintain market momentum and export orders
  • Tea industry needs to earn about US$ 0.9bn within next 8 months to reach this year’s earnings target 

By Shabiya Ali Ahlam
The Ceylon Tea export target for 2020 will not be revised despite the COVID-19 crisis having hit the global economy, and the Sri Lanka Tea Board (SLTB) said it is confident that the industry stakeholders would step up efforts, specially in value addition, to fulfill the earnings target for this year.

Stating that the implications of the crisis are not a major concern to Sri Lanka’s tea industry as of now, the SLTB Chairman Jayampathy Molligoda told Mirror Business that the authority has not considered revising the 2020 export target for Ceylon Tea. 


“The export target is not being revised as yet. We are in constant touch with the stakeholders and they are doing what is necessary to maintain market momentum and export orders, provided all stakeholders across the industry continue to maintain the high quality standards and deliver on time to the designated markets, the year-end target can be met,” 
Molligoda said.  


The SLTB has announced an export target of US$ 1.3 billion for this year and an increase in production to 340 Mnkgs.


With the January-April 2020 cumulative export revenue figure having reached approximately US$ 0.35 billion, the industry would have to earn about US$ 0.95 billion within the next eight months to reach the set target.According to Molligoda, an improved focus on value addition in the coming months is what would help the industry fetch higher earnings. 


Although the industry witnessed 35 percent drop in export income via value addition, Molligoda is confident in the exporters making up what was lost by the end of the year.


He said that with over 200 exporters focusing on different target markets across the globe, with the right marketing mix and product portfolio the expected earnings could be fetched.
However, Molligoda said it is imperative to improve the focus on product and quality management as the soil texture, tea bushes and factories have lost their standards over the years. 


 

April tea output, exports take a dip

Sri Lanka’s tea production and exports witnessed a contraction in the month of April with the total crop and export volumes reaching 20.2 MnKgs and 
18.1 Mnkgs.


The production recorded for April 2020 was 3.4 MnKgs less compared to the 23.6 Mnkgs achieved in the corresponding month of the previous year.


Statistics from the Tea Board showed that elevations have shown a decrease compared to April 2019. According to Forbes & Walker Tea Brokers, the production volume achieved was the lowest for the month of April since 1993 when only 18.3 M/kgs were produced.


Taking into account the January – April 2020 production, for the first four months of the year a total of 73.3 Mnkgs was recorded. The January–April 2020 cumulative is a deficit of 23.7 MnKgs compared to 97.0 Mnkgs posted in the same period the previous year.


On a cumulative basis too all elevations have shown a decrease Year-on-Year (YoY), with Low-Growns showing the highest deficit followed by High Growns and 
Medium Growns. 


Forbes & Walker Tea Brokers said that the January – April cumulative figure is the lowest since 1993, when the total crop was only 
70.6 Mnkgs.


On the export front, the April 2020 figure is a decrease of 2.6 MnKgs compared to the corresponding month of the previous year.


Bulk tea exports have shown a growth YOY, whilst packeted tea and tea bags have recorded a significant decrease. 


Ceylon Tea exports fetched a total revenue of Rs. 15.1 billion for April 2020, which is a Rs. 2.2 billion dip compared to the Rs. 17.3 billion achieved in April 2019.


Analysing the major importers, Iraq has retained the top position, followed by Turkey and Russia. Iran is placed fourth. 


China, Azerbaijan, Chile, Saudi Arabia and Syria are the other noteworthy importers. Meanwhile, exports to Libya, UAE and Jordon have shown a significant decrease during the period under review. 

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