Tea industry in 1Q of 2025: An overview

By Ceylon Tea Brokers PLC

The Sri Lankan tea industry saw an increase in production and exports but recorded a drop in the National Average price for the period from January to March 2025, compared to the same period in 2024.

Iraq, Russia, and Libya continued with strong demand for Sri Lankan tea and were the top three importers for the period January to March 2025.

Macroeconomic factors continued to fundamentally challenge the tea industry framework, with variations in supply and demand, currencies, and the political climate in importing countries.

For the first quarter of 2025, total production reached 61.78 million kilograms, recording an increase of 3.61 million kilograms from the 58.17 million kilograms recorded in January-March 2024. All three elevations recorded an increase in production when compared to the corresponding period in 2024. In CTCs, Medium Grown teas recorded an increase whilst High Grown and Low Grown varieties experienced declines.

The Sri Lankan tea industry experienced growth in the first quarter of 2025, with total production increasing by 3.61 million kilograms compared to the same period in 2024. Export volumes also rose during this period, recording an increase of 0.88 million kilograms.

The National Average tea price for January-March 2025 declined to Rs. 1,179.32 ($ 3.98) per kg from Rs. 1,286.99 ($ 4.11) during the same period in 2024, representing decreases of Rs. 107.67 in Rupee value and $ 0.13 in Dollar terms. 

Price variations across elevations showed Low Grown teas averaging Rs. 1,239.35 ($ 4.18), Medium Growns at Rs. 1,040.44 ($ 3.51), and High Growns at Rs. 1,118.77 ($ 3.78). All three elevations recorded a drop in Rupee value. However, in the Dollar value, the High Grown category increased whilst the Medium and Low Grown categories experienced declines. Low Growns, with the largest market share of 59.80% of production, recorded a drop of Rs. 141.32. Meanwhile, the High Grown and Medium Grown categories also saw decreases, falling by Rs. 36.95 and Rs. 82.26, respectively.

Sri Lanka tea exports for the period January-March 2025 amounted to 63.21 million kilograms vis-à-vis 62.33 million kilograms recorded for the same period last year (+0.88 million kilograms). The FOB average price per kilo for this period stood at Rs. 1,738.80 ($ 5.87) in contrast to Rs. 1,779.43 ($ 5.68), which recorded a decrease in the Rupee term (-Rs. 40.63) and an increase in Dollar value (+$ 0.19) when compared to the corresponding period in 2024.

The FOB value of Tea Bags has dropped in comparison to the same period in 2024. The total revenue realised for the period January-March 2025 from tea exports was Rs. 109.90 billion ($ 370.92 million) compared with Rs. 110.91 billion ($ 354.18 million) recorded for the period January to March 2024. It’s a drop in the Rupee term (-Rs. 1.01 billion) and an increase in the Dollar value (+$ 16.74 million) compared to the same period in 2024. Teas in packets and bulk showed a decrease in FOB Value.

Iraq maintained its position as the leading importer of Sri Lankan tea during the first quarter of 2025, with Russia and Libya following as second and third largest markets, respectively. Exports to Iraq increased by 0.61 million kilograms and Libya saw a significant increase of 4.29 million kilograms. However, shipments to Russia declined by 0.09 million kilograms. Exports to the UAE and Turkey dropped by 2.46 million kilograms and 0.76 million kilograms, respectively. Chile rose by 0.9 million kilograms, but Iran recorded a decline of 0.68 million kilograms. Exports to China saw an increase of 0.06 million kilograms.

Tea imports by country – 2023

Global purchases of imported tea totalled $ 6.65 billion in 2023. The overall value of tea imported by all buyer countries declined by an average 6.5% since 2019, when global tea purchases cost $ 7.12 billion.

Year on year, the total Dollar cost of imported tea fell by 12.2% compared to $ 7.58 billion during 2022. In 2023, the five most valuable import markets for tea were Pakistan, the US, United Arab Emirates, Russia, and the UK. Combined, those major importers generated almost a third (31%) of the worldwide sales of imported tea.

Black Tea maintained its dominance at 76.7% of imports, while Green Tea’s share slipped slightly to 23.3%. Asia emerged as the largest importing region with $ 3.0 billion worth of tea purchases (44.8% of global total), followed by Europe (27.5%) and Africa (14.4%). The remaining imports were distributed across North America (10%), Oceania (1.9% led by Australia and New Zealand), and Latin America/Caribbean (1.4%). This contraction reflects broader market trends and shifting consumer preferences in the global tea trade.

The world’s major tea producing countries are currently witnessing moderate production levels. The tea prices are expected to be at healthy levels going into the second quarter.