Tea exports up Rs. 678 m in 1Q as Iraq retains import crown

Confirming improved prospects tea exports have got off to a positive start in the first quarter of this year after suffering lowest value in five years in 2015. 

Total revenue from tea exports in the first three months of 2016 increased by Rs. 678 million or 1.5% to Rs. 45.07 billion with volume growing by 1.2% to 74.45 million kilos.

A drop in approximate average unit F.O.B. value per kg of Re. 1 when compared to the same period has been recorded, noted John Keells Tea Plc in its weekly statement.  

In 2015, export earnings from tea, the second largest export commodity in Sri Lanka,which accounts for about 13%  of total export earnings, declined significantly by 17.7% to$ 1.34 billion, recording the lowest value for the last five years.In that context the positive performance in 2016's first quarter is encourgaing. 

John Keells Plc said Iraq with 10.8 million kilos has maintained the position as the largest importer of Sri Lankan teas followed by Russia in the first three months of the year.  

Whilst the exports to Turkey has weakened quite sharply this year, exports to Russia and Iran have shown an increase.

Ceylon Tea Brokers Plc said cumulative exports up to end March 2016 shows that the volume of Tea in bags and the FOB value shows an increase when compared to the same period last year.

It also said exports in March amounted to 26.72 Mn/kg, up 1.64 million kilos or +6.10%. The FOB price per kg for March 2016 was Rs. 607.34 up from Rs. 598.64 when compared to the same period last year.

In 2015, the average export price of tea declined significantly by 12.2%, to $4.37 per kilogram in 2015, from $ 4.97 per kilogram recorded in 2014, while the export volume also declined by 6.2% to 307 million kilos.

John Keells said Sri Lanka’s tea production for the month of March 2016 was recorded at 22Mkgs, which was a 28% deficit when compared with the same period of 2015. High growns recorded a decrease of 24% and medium growns recorded a decrease of 26%, whilst the low growns recorded a decrease of 29%. Sri Lanka’s tea production in the first three months of this year at 70Mkgs has recorded a decrease of 11% when compared with the same period of 2015.

The produce broker also said world crop figures to end February indicate a momentous increase recorded in Kenya – a surplus of 28.35 Mkgs when compared with the same period 2015. The prices realised for the Kenyan teas however show a decline in comparison to the other tea growing nations in Africa.

In a related development, John Keells Plc said the quantity of 0.86 Mkgs of ex-estate teas met with improved demand. Better Western high grown BOPFs on offer gained, whilst the below best and plainer types advanced substantially. A few select best BOPs sold well. 

The brighter Nuwara Eliya BOPFs met with little demand, the BOPs too were irregularly lower.  A steady market prevailed for the Uva BOPs and BOPFs. The high and medium grown CTC PF1s gained. Low grown PF1s were mostly firm with a few select best types gaining on special inquiry. All BP1s met with good demand. 

There was excellent demand for the 2.4 Mkgs of low growns that were on offer at this week’s tea auction. In the Leafy category, most varieties advanced Rs. 10 to Rs. 15, whilst in the Small Leaf segment, most grades advanced Rs. 10 to Rs. 15, with the exception of FBOPs which moved up Rs. 20 and more at times. FBOPF1s too met with strong demand gaining by Rs. 10 to Rs. 20 and at times more. Select best Tippy/premium varieties maintained, however the others met with irregular demand and tended a little lower to last, poorer sorts shed Rs. 20 to Rs. 30.

There were good demand from the Russian, Iranian, Turkish   and the other Middle Eastern markets.