January tea output up 6%

Wednesday, 22 February 2012 01:46 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka’s tea production rose a slight six per cent in January compared to the same month a year ago, when output was especially low, the State-run Tea Board said on Tuesday.

January tea output was 22.41 million kg compared to 21.14 million kg in January 2011.

“This is the normal output. The increase is due to the lower production recorded in the previous year,” Sri Lanka Tea Board Director General H.D. Hemarathna told Reuters.

Sri Lanka’s tea output fell 0.9 per cent to 328.37 million kg last year from a 2010 record of 331.43 million kg, but higher prices meant 2011’s earnings from the country’s top agricultural export increased 7.1 per cent to a record $1.5 billion.

Analysts say the earning outlook for 2012 is still unclear due to a possible dip in exports to Iran, which buys a fifth of Sri Lanka’s tea directly but which is being subjected to a raft of Western trade sanctions.

Other countries in the Middle East are also major buyers, but political turmoil and violence may limit their appetite for Sri Lankan tea, traders said.

Tea is one of the $ 59 billion economy’s main foreign currency earners, along with remittances, garment exports and tourism.