History of Ceylon Tea

In a very challenging year of poor supply, turbulent domestic working environment, compounded by multiple international challenges; Sri Lanka exported 250.19 Mn Kg to 148 countries. 52% of tea exports were absorbed by destinations in North Africa and The Middle East, Russia/CIS 17%, UK/Europe 10%, Asia 9%, North and South America 6%, Japan/ Australasia 4% and Africa / Others 2%

Tea Export Quantities Plunged to 25-year Low

Despite reasonable weather conditions throughout 2022, Sri Lanka tea production declined sharply and is likely to end the year at around 252 Mnkg compared with 299 Mnkg in 2021. This trigged a sharp drop in tea export quantiles in the year 2022 with volumes declining 13% YoY 2021 from 286 to 250 Mnkg.

The high demand for Ceylon Tea at Auctions throughout the period under review, enabled the country to achieve export earnings of $ 1.258 bln compared with $ 1.324 the year before and $ 1.240 in 2020. The resulting FOB per kg of $ 5.03 is the highest in the last four years and well above the 2021 figure of $ 4.63 and 2020 $ 4.67.

International buyers loyal to Ceylon tea paid up to 9% more despite high freight rates and disrupted shipping schedules and other constraints.

SRI LANKA TEA EXPORTS

2022 Regional Distribution (Kg %)

Review of Major Tea Export Destinations

The number one destination for Sri Lanka’s exports in 2022 was Iraq and tea shipped to and through Iraq which amounted to 43.2 Mnkg. Sri Lanka earned USD 146 million. The FOB value per kilogram however when compared with the national figure of $ 5.03 per kilogram is a low $ 3.39.

Russia comes second with imports of 24.7 Mnkg down 10% from 27.3 the year before. The FOB value per kg however is a comparatively high $ 5.08 with around 20% of all imports in value added form.

The UAE as a major trading center had 22.5 Mnkg shipped to this destination at a total FOB $ 5.28 per kg. Turkey follows with a quantity of 15.5 Mnkg down 48% from 29.7 Mnkg following significantly reduced transit traffic. Iran follows with 13 Mnkg down from 15.8 Mnkg the year before. Iran’s FOB value per kg was $ 5.42 with 49% of imports in value added form.

Value Added Exports

56% of Sri Lanka’s tea exports were in value added form with a grater quantity of this segment amounting to 110 MnKg shipped in Packets. While packing specifications within this category varied, it enabled marketers to meet specific needs of their clients.

Iraq, Turkey, Libya, UAE and Iran were the top five destinations for Packet Tea Exports.

Tea Bag exports amounting to 21.6 Mnkg accounted for 9% of all tea shipped in the year 2022. Jordan absorbed 1.87 Mnkg nominally ahead of Saudi Arabia 1.82 Mnkg. Poland and Australia follow at 1.5 and 1.3 Mnkg respectively. Ghana 1.1 Mnkg, USA 1 Mnkg, Syria 0.87 Mnkg, Japan 0.79 Mnkg, Chile 0.75 Mnkg and the Netherlands 0.74 Mnkg make up the ten most important destinations.

Interestingly another 9.7 Mnkg or 45% of all Tea Bag exports have been shipped to more than 100 other destinations.

Instant Tea Shipments are categorized under Value Added segment. A total of 3.07 Mnkg was exported in 2022 a quantity very similar to previous year’s figure of 3.03 Mnkg. A greater volume has been shipped to Ireland at a $ FOB value of 8.12.

Green Tea shipments are similarly categorized and a total of 4.22 Mnkg was exported in 2022 against 4.58 the year before. USA was the prime destination and absorbed 14% of the total. Russia followed with 11% with Libya 9%.