Tea exports suffer mega blow in March owing to COVID-19

Monday, 27 April 2020 02:38 - - {{hitsCtrl.values.hits}}

Volume shipped down by near 50% to lowest ever at 13.8 m kilos; value suffers similar dip to Rs. 11.5 b

Sri Lanka’s tea exports suffered a major blow in March recording the lowest-ever shipment and sharp dip in value as COVID-19 mitigation measures caused disruption to trade.

Tea exports in volume in March amounted to 13.8 million kilos, lowest ever and surpassed the previous lowest of 14 million kilos shipped in April 2009 according to Forbes and Walker Tea Brokers. Compared to a year earlier, March 2020 export volume was down by 47.7% or 12.6 million kilos.

“This (decline) is mainly due to the disruption to work during the latter half of the month on account of the COVID-19 pandemic,” Forbes and Walker Tea Brokers said.

All categories of exports (i.e. Tea bags, Packeted tea and Bulk tea) suffered a significant decrease compared to the corresponding period of 2019. Export of tea in packets in March 2020 was 6.3 million kilos worth Rs. 4.85 billion, whereas a year ago it was 12.7 million kilos worth Rs. 9.8 billion. Tea exports in bulk which was 5.7 million kilos worth Rs. 4.1 billion in March this year, down from 10.4 million kilos worth Rs. 7.78 billion. Tea in bags which amounted to 2.4 million kilos worth Rs. 3.55 billion in March last year, had declined to 1.3 million kilos worth Rs. 1.85 billion.

Similarly, revenue too at Rs. 11.5 billion for March 2020 shows a decrease of Rs. 10.9 billion or by 48% from a year earlier. The FOB value for March 2020 was Rs. 836.74 per kilo, down by Rs. 13.74 from March 2019.

Forbes and Walker said January-March 2020 exports amounted to 59.5 million kilos, down by 14.1 million kilos from the corresponding period of last year. The main categories of exports on a cumulative basis showed a decrease as well compared to the corresponding period of 2019.

Total revenue of Rs. 49.2 billion for the first quarter of 2020 was lower by Rs. 13.2 billion from 2019.

The FOB value for the period January-March 2020 of Rs. 826.39 was a decline of Rs. 21.18 per kilo from a year earlier.

When analysing the major importers of Sri Lankan tea, Iraq has secured the No. 1 position followed by Turkey and Russia. Iran, with imports totalling 3.9 million kilos is placed 4th, whilst Azerbaijan, Chile, Saudi Arabia, China and Syria are the other noteworthy importers during the period under review, according to Forbes and Walker Tea Brokers.

It said destinations such as Ukraine have shown a growth in imports during the period under review, whilst Jordan, UAE and Germany have shown a decrease in imports compared to the corresponding period of 2019.