Sri Lanka’s tea crop falls short in June

August 3, 2006 (LBO) – Sri Lanka’s tea output dipped 2.0 percent for the six months to June, after good rainfall brought in a record harvest in 2005, a commodity broker said Thursday. Total production in June slipped 10.7 percent to 26.24 million kilos over the same period 2005, led by a 20.7 percent drop in teas growing in higher elevation.

Sri Lanka, one of the top tea producers, grows tea in three elevations – high, mid and low.

Black tea production for June also fell 10.5 percent to 24.74 million kilos, which also dragged down six months cumulative crop figures by 2.5 percent to 152.39 million kilos, Asia Siyaka Commodity Brokers said.

Asia Siyaka forecasts the island’s year-end tea crop to be flat at 311 million kilos, based on second half production being the same as last year.

Ceylon Tea, as the island’s chief brew is popularly known, is fighting for space in the global commodity market with Kenya.

Kenyan tea industry is recovering from drought spell, with production of the country’s largest export falling 8.0 percent to 26.4 million kilos in May.

The Tea Board of Kenya is forecasting a fall between 10 and 16 percent in 2006 compared with a year earlier due to less rainfall and the lingering effects of a just-ended drought.

Despite the declines, the board said export earnings in May rose significantly by 39 percent from 42 million dollars to 58 million dollars.

Tea, Sri Lanka’s single largest net foreign exchange earner, brought in 814 million dollars worth of sales in 2005.

Black Tea June Todate
  2006 2005 +/- % 2006 2005 +/- %
High Grown 6,903,731 8,709,648 -20.7 42,033,952 46,234,061 -9.1
Medium
Grown
4,192,908 4,914,632 -14.7 28,260,917 30,016,643 -5.8
Low Grown 15,138,798 15,757,121 -3.9 92,193,898 89,501,593 3.0
Total 26,235,437 29,381,401 -10.7
162,488,767

165,752,297
-2.0

(Source: Asia Siyaka Commodity Brokers)

For the five months to May, Sri Lanka earned 344.3 million dollars (up 12.2 percent), after shipping tea to key markets like Russia, the Commonwealth of Independent countries and Britain.