Tea industry continues with high crop, prices, and exports

Source:FT

• Q1 cumulative production totalled 74.03 m kg, up by 20.35 m kg
• Production up 14.88 m kg in March, shows signs of recovery amidst pandemic
• March export revenue up Rs. 13 b YoY to Rs. 24.54 b, 1Q revenue Rs. 65 b
• FOB value of Rs. 950.81 ($ 4.86) highest ever
• China exports soar by 160% YoY  

The tea industry witnessed a recovery amidst the COVID pandemic, with a substantial increase in production as well as in export volumes, brokers said this week.

The country’s cumulative tea production in the first quarter totalled 74.03 million kg, recording a gain of 20.35 million kg vis-à-vis 53.68 million kg in the same period a year earlier. This shows signs of recovery with January to March gaining 20.35 million kg over the corresponding period of COVID-19-affected March 2020. On a cumulative basis, all elevations have also shown substantial gains, with the Low Growns in particular gaining 48% over the corresponding period of 2020. 

The cumulative production of CTC teas in the first quarter totalled 6.58 million kg, recording a 1.26 million kg increase compared to 5.32 million kg of January-March 2020.

In analysing the respective elevations, Forbes and Walkers said all elevations have shown a significant gain year-on-year (y-o-y) when compared to the corresponding period of 2020. The country’s tea production in March totalled 28.41 million kilograms (m kg), an increase of 14.88 m/kg compared to 13.53 m/kg in the same period last year.

All elevations have shown substantial gains, with Low Growns in particular gaining 129% over the corresponding month of 2020. The total tea exports in March was 25.81 million kg, an increase of 11.99 million kg compared to 13.83 million kg in the same period a year earlier.

When analysing the main categories of exports Forbes and Walkers said that all key categories of exports (Bulk Tea, Tea Bags and Packeted Tea) have shown a substantial increase compared to the corresponding period of 2020.

In March, the total revenue of Rs. 24.54 billion shows an increase of Rs. 12.97 billion compared to Rs. 11.57 billion recorded in the same period a year earlier.

The FOB value of Rs. 950.81 ($ 4.86) records the highest-ever FOB value, surpassing the previous highest of Rs. 940.09 ($ 4.87) recorded in February this year. When compared to Rs. 836.74 ($ 4.60) of March 2020, records an increase of Rs. 114.07.

The cumulative exports in the first quarter totalled to 69.89 million kg, showing an increase of 10.31 million kg compared to 59.58 million kg recorded in the same period a year earlier. Forbes and Walkers said that once again all main categories of exports (Bulk Tea, Tea Bags and Packeted Tea) have shown an increase compared to the corresponding period of 2020.

The revenue generated in the first quarter was Rs. 65.62 billion, an increase of Rs. 16.38 billion vis-à-vis Rs. 49.23 billion in the same period last year. Total FOB value of Rs. 938.97 ($ 4.87) shows a gain of Rs. 112.58 compared to the Rs. 826.39 ($ 4.57) during January to March in 2020.

Turkey retained the top position, as the major importer of Ceylon Tea, followed by Iraq and Russia with China occupying the fourth position. Iran, which has moved down to ninth position from the fourth position it occupied in 2020, records a fairly substantial decrease in imports during the first quarter of the year.

Other noteworthy importers include the UAE, Azerbaijan, Libya and Syria. Meanwhile, destinations such as Saudi Arabia, Chile and the USA have recorded a fairly significant decrease in imports during the period under review.

It is noteworthy that exports to China have increased substantially (160%) Y-o-Y.