Tea industry weighs impact from USA tariff on Sri Lanka rising from 0 to 44%

The tea industry is weighing the impact of the USA tariff on Sri Lanka tea rising from 0% to 44%.

Sri Lanka exported 6.4 Mnkg of tea to the USA in 2024 up 22% on the 2023 figure of 5.2 Mnkg. Tea exports from Sri Lanka which were previously free of all tariffs, stand to be hit by a 44% tariff one of the highest imposed on any tea producing country. 

Asia Siyaka Commodities PLC said in 2024 Sri Lanka earned approximately $ 45 million at a high average FOB per kg of $ 7. The approx. FOB per kilo for all tea exported from Sri Lanka in 2024 was $ 5.84, making the FOB value per kilogram of exports to the US almost 20% more than the national average FOB. Sri Lanka exported a total of 245 MnKg in 2024, making the US share 2.6%. It is significant however that the greater proportion comprises high and mid grown tea with some low grown teas as well. The market impact, therefore, could be significant in those niches.

ITC statistics confirm that in 2024 USA imported a total of 105 Mnkg from all countries, making it the fourth largest tea importer in the world after Pakistan 222 Mnkg, Russian federation 130 and UK 113; of which more than 85% of is Black Tea. Argentina as the largest supplier accounted for more than 46% of Black Tea supply with a quantity of around 42 Mnkg. Sri Lanka’s share of 6.4 Mnkg is 7%. India shipped around 10 Mnkg of Black Tea with China around 5 Mnkg followed by Malawi 4.7 Mnkg. and Vietnam 4.3 Mnkg.