Excessive rain curbs Sri Lankan tea production

Mar. 02 (LBO) – Sri Lanka’s tea production for January dipped to 24.7 million kilos from 26.0 million kilos a year earlier due to excessive rain, a commodity broker said Thursday. January production shows a slight increase over December figure of 23.3 million kilos, but Sri Lanka’s crop has been on the downward slope since October 2005, Asia Siyaka Commodity Brokers said.

“The production situation in January would have been much worse if not for the low grown segment, which barely exceeded 2005 figure of 14.9 million kilos, by achieving 15.0 million kilos,” the report said.

Low Grown figure though only nominally higher than 2005 is only second to the record harvest of 16.3 million kilos achieved in 2001.

However, a strong demand for small leaf grades has triggered higher production of CTCs (cut twist curls), which have increased 46 percent to 1.28 million kilos this year.

High growns fell 14.0 percent to 5.9 million kilos (the lowest since 1994), while mid growns declined 12 percent to 3.7 million kilos (a drop since 1996).

Sri Lanka, one of the world’s top tea exporters, shipped 24.8 million kilos of tea in January, the highest ever in a single month.

Revenues from tea exports for January was also the highest ever so far topping Rs6.8 billion (US$ 67 million) over Rs6.4 billion (US$64.9 million) reported in 2005.

Kenya

The island’s teas currently compete fiercely with Kenya in the world market, but a drought in the African rival has helped boost tea prices.

However, Asia Siyaka says Kenya reported 55 millimeters of rain in some parts of the country, which will help increase crop levels towards the end of the month.

The positive news could be negated if plantation unions push ahead with a strike in small time Kenyan plantations.

Sri Lanka earned US$814 million from shipping tea to overseas buyers last year, up from US$741 million in 2004, Asia Siyaka said.

Tea is Sri Lanka’s largest single net foreign exchange earner after remittances from its countrymen employed abroad.

-Mel Gunasekera: melg@vanguardlanka.com