Tea export earnings may surpass US$ 1.5 bn this year – Tea broker

Tea prices recorded an upward trend in rupee terms over the 2011/2012 financial year, largely as a result of a depreciated rupee and despite lowered auction prices as compared with the previous year, according to Chairman, Ceylon Tea Brokers PLC, Chrisantha Perera.

Perera went on to state that despite prevailing instability in many of Ceylon Tea’s key markets, tea prices at the Colombo Auction could start to improve by moving up to reflect rupee prices, as a result of a shortfall in global production during the first half of this year.

“It is hoped t hat Colombo Auction Prices should start moving up to reflect rupee prices in keeping with or even surpass the US$ equivalent realised in 2011. Optimistically, we hope we could exceed even the record prices of 2010 during the second half of 2012. The negatives continue to be the uncertainty in the Middle East, which is a key region for Ceylon Tea and the adverse economic climate confronting Europe in particular.” Perera said.

He noted that export earnings inclusive of “Imported Tea Re-Exported” reached a new high in Rupee terms, despite a drop in production and lower average auction prices with export earnings reaching US$ 1.40 billion in 2011, as compared with US$ 1.44 billion in 2010 whilst the quantity of imported tea in 2011 amounted to 11.4 million kilos as against 12.2 million kilos in 2010. Re-exports meanwhile, amounted to 19.4 million kilos, from 18.6 million kilos in 2010.

“It is hoped that export earn- ings for tea will cross the milestone of generating over US$ 1.5 Billion in 2012 notwithstanding the falling value of the Rupee against the US$ during the current year. Although Sri Lanka is now the third in the league of tea exporting countries in volume terms, marginally behind China and substantially below Kenya, this industry remains the highest export earner in value terms globally which reaffirms that we as a country add more value at the point of export compared with other tea exporting countries.”

“This is something all stakeholders associated with t he Industry needs to consolidate and further develop in the years ahead together with the State, who should provide the correct policy guidelines and where necessary the appropriate incentives.” Perera said.