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295 million kg tea production target set for 2021

12 Feb 2021

By Zahida Rizvi   The Sri Lanka Tea Board targets to export 295 million kg of tea in 2021, although achieving it depends on the external and internal factors of the production sector and international trend impact, The Morning Business learns. “The Sri Lanka Tea Board is planning to implement the global tea campaign for 12 markets this year, beginning from Russia, Ukraine, and China,” Sri Lanka Tea Board Export Director Pavithri Peiris said, speaking to The Morning Business. While Ceylon tea imports to China in 2020 was 14.2 million kg, the Tea Board hopes to increase the volume by 2.5 million in 2021, taking into account the rapid, substantial growth of China’s tea market, converting from green tea to black tea. A Memorandum of Understanding (MoU) was signed with Fujian Star China International Trade Company Ltd., a subsidiary company of Fuzhou Benny Tea Industry Co. Ltd. in China, which consists of a $ 6 trillion consumer market, to establish an online and offline marketing platform for Ceylon tea. Starchina International Trade Company Ltd., also a subsidiary company of Fuzhou Benny Tea Industry, will buy more than four million kg per year and predict to increase the import quantity by 10-15% annually, with a value addition to Ceylon tea Year-on-Year starting from 60,000 kg in the first year. Sri Lanka’s tea production has remained at around 300 million kg over the past two decades, with a peak 340 million kg crop recorded in 2013, as the country’s tea-growing land has remained unchanged, according to official data. Tea production in 2018 was at 303.8 million kg, down from 307.1 million kg from a year earlier. The country still exports most of its produce as loose tea in bulk or packets, whereas the world now enjoys new products such as instant tea and iced tea. Sri Lanka’s tea export revenue has stagnated between $ 1 billion and $ 1.63 billion from 2007 to 2018, with a peak of $ 1.63 billion recorded in 2014. In 2018, Sri Lanka exported tea worth $ 1.43 billion, down from $ 1.53 billion in 2017. Revenue from tea exports recorded in the period from January-December 2020 is Rs. 230.1 billion in comparison to the previous best of Rs. 240.6 billion in 2019, a decline of Rs. 10.4 billion. Moreover, exports for the period from January-December 2020 totalled 265.5 million kg in comparison 292.6 million kg from January-December 2019, showing a decline of 27.0 million kg. Meanwhile, the Tea Board has also organised a Ceylon tea pavilion for the Gulf countries in 2021, along with leading tea exporters from Sri Lanka. Tea consumption continues to be dominated by Asian countries, particularly India and China, estimated to be 55% and more of global demand. Middle Eastern countries and the Gulf region absorb over 54% of tea exported from Sri Lanka. However, European countries facing an economic downturn could impact tea prices in a significant manner. It is noteworthy that value-added tea exports now account for almost 38% of the total export volume.


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