TEA PRODUCTION

Tea production during this year is expected to drop by 8% compared to-the-record production of 318 million kg in 2008.
Droughts in the Tea growing region played havoc with the numbers and in the first quarter of 2009, tea production dropped by 40% which improved to 24% in the second quarter and 18% in the third quarter. However, monthly figures in October indicated an increase with production at 25.9 million kg for the month this year compared to 24.3 million kg last year. Total tea production however from January to October stands at 234.78 million kg last year, a cumulative drop of 14.5%.
Speaking to Daily FT, Tea Board Chairman Lalith Hettiarachchi said that total production would be around 295 million kg at the end of the year compared to the record production of 318 million kg in 2008. He added that the labour strike in September which resulted in a loss of production by at least 2.5 million kilograms.
The global tea shortage in 2010 is expected to increase to 110 million kilograms compared to 100 million kg this year and in the wake of falling supply global prices are also expected to increase by 15%.
While global analysts predict the world wide tea shortage of 10% due to droughts in Kenya and India, two of the largest producers in the world, analysts told the Daily FT, that if the current monsoon continues, tea production in the first quarter of 2010 would be higher than the yield this year.
TEA EXPORTS
Sri Lanka is the second largest exporter of tea in the world after Kenya with 320 million kg
leaving the island last year. In 2008 export earnings struck a record high of 123 billion dollars 0
for the year, up from 1.02 billion dollars in 2007 but for 2009, the estimate is cautious.
Tea Traders' Association President Jayantha Keragala said that till September 2008, the total exports was USD.991 million compared to the USd.874 million recorded this year, a drop of 12%. However he pointed out that the recession took place in the -last quarter of the year. "We experienced a major decline during that period but this year, we see no decline and at least, value wise, we hope to catch up", he said. Sri Lanka exported 245 million kgs of tea in the first nine months till September, 2008, compared to the 221 million kg this yea, a drop of 24%. "Overall, we expect a deficit of around 40 million kg for the year but because of the increase in the prices, we hope to earn close to USD.1.2 billion by the end of the year", be concluded.
Meanwhile, in October 2009 the rupee value of exports reached a record high of Rs.13.3 billion 17% higher than the export earnings of October 2008 when the crisis hit the industry.
December 9, 2009