Ceylon Tea Brokers is hoping that the total tea crop for 2017 will at least record a figure over the ‘psychological barrier’ of 300 million kilos.
Sri Lanka’s national tea production has dropped to under 300 million kilos and is the lowest for over a decade barring 2009.
This substantial drop was partly due to adverse weather conditions and, as importantly, the restriction placed on the availability of weedicide and consequent curtailment of necessary agricultural practices and inputs were contributory factors to this extremely poor performance.
All three elevations recorded lower figures, according to Ceylon Tea Brokers Chairman Chrisantha Perera.
“This trend continued during the first two months of 2017, although there was a welcome increase in our national crop for March. It is too early to predict whether this pattern will be maintained for the rest of the year and we can only hope that the total tea crop for 2017 will at least record a figure over the ‘psychological barrier’ of 300 million kilos,” he said.
The single most redeeming feature on the performance of Sri Lanka’s tea industry last year has been the increase in the auction averages compared to 2015 both when expressed in Sri Lankan rupees and the US dollar equivalent.
Following the limited availability of tea, together with improved demand from some of our main markets, prices have moved up further during the first four months of 2017, he said “At the time of compiling this Report to date, auction averages for the current year are at all time highs both in terms of rupees as well as the US dollar equivalents.”
“This encouraging sign however should be tempered with a word of caution in that if the availability of tea out of Sri Lanka continues to be limited, at some point, we may lose our market share in the more important importing countries due to a lack of regular and adequate supply,” he said.
Ceylon Tea Brokers’ Director/CEO Waruna De Silva said that the revenue grew by 25.7% to Rs. 419.7 million during the year from Rs. 334.0 million previous year.
“Profits from Operations was Rs. 158.36 million, a 77.08% increase over the previous year,” he said.
In addition, the company had a more successful year in 2016/17 compared with 2015/16, although the Sri Lanka tea industry continued to experience challenging times.
Tea prices at the Colombo Auction appreciated fairly sharply, particularly as the year progressed in the backdrop of a sharp fall in Sri Lanka’s tea production compared to previous years.
Tea prices also benefitted from higher oil prices that encouraged greater demand from Middle Eastern countries and Russia who are the two most important market segments for ‘Ceylon Tea’.
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