By Shabiya Ali Ahlam
Sri Lanka’s 2015 tea production declined to a three-year low of 328.96 million kilogrammes (Mkg).
Statistics released by the Sri Lanka Tea Board (SLTB) showed the 2015 production figure dipped 3 percent year-on-year (YoY) by nine Mkg compared to 338.03 Mkg achieved in 2014.
While the highest annual production of 340 Mkg was recorded in 2013, quantities have shown no improvements since. Adverse weather conditions have been attributed to the reduced production levels.
Both high and low growns declined YoY with the latter elevation accounting for almost 85 percent of the national crop loss in 2015. Medium production figures however were maintained, likely through movement of tea from other elevations.
Stating on the production outlook for 2016, Asia Siyaka Commodities said country would need exceptional growing conditions and revival in the market at least through a depreciation of the rupee, if the 2016 annual production figure of 330+ Mkg to be met.
“A key factor would be the dry conditions projected for 1Q 2016 and this could play a significant part in 2Q as well.”
It added that reduced fertilizer subsidy and banning of cost-effective weedicide would place both estate and smallholders under pressure, considering the added restriction of lower prices.
Continuing uncertainty over wage negotiations could also trigger disruption of work in estates, any negotiated wage increase would further pressurize the plantation companies.