Tea export earnings down 5% in dollar terms, but hit record-high in rupee terms amid sharp depreciation

Earnings from Sri Lanka’s tea exports contracted 5 percent Year-on-Year (YoY) or by US$ 65.7 million to US$ 1.259 billion in 2022 due to reduced quantities shipped to importing markets.

However, tea exports earnings in rupee terms rose to a record high of Rs. 411 billion, mainly due to the steep depreciation of the rupee against the US dollar.

The weekly economic indicators released by the Central Bank in the first week of January showed that during 2022, the Sri Lankan rupee depreciated by 45 percent against the US dollar.

The Lankan rupee also depreciated by 41.4 percent against the euro, 38.6 percent against the Indian rupee, and 38.1 percent against the sterling pound during 2022.

In terms of volumes, Sri Lanka exported a total of 250.2 MnKgs of tea in 2022, a 12.5 percent decline when compared with the volumes shipped in 2021 (285.9 MnKgs).

According to Sri Lanka Tea Board (SLTB), “netting a revenue marginally less than 2021 shows the continued high demand for Ceylon Tea”.

However, tea exports in 2022 were the lowest in 25 years. In 1997, a volume of 247 MnKgs was shipped. Since then, the annual exports have been rising, recording the highest ever quantity of 327 million kilos in 2014.

“Sri Lanka’s tea export volume is directly related to production. The 2022 production figures, which are expected shortly, will be one of the lowest in recent times. The harvest was affected due to many shortcomings experienced since 2021, the fertiliser crisis and the banning of herbicides being among the main contributory factors,” SLTB said.

Meanwhile, the annual FOB unit price of US$ 5.03 per kilo for 2022 compared to US$ 4.63 per kg in 2021 confirms the distinct preference for Ceylon Tea, SLTB added.

(Courtesy: Daily Mirror)