Higher realisations push up tea export earnings in Jan-Oct 2021

Our Bureau Updated - January 04, 2022 at 10:09 PM.

Volumes drop 9%, prices up 11 %

Tea production in Sri Lanka, formerly Ceylon, is of high importance to the Sri Lankan economy and the world market. The country is the world's fourth largest producer of tea and the industry is one of the country's main sources of foreign exchange and a significant source of income for laborers, with tea accounting for 15% of the GDP, generating roughly $700 million annually. In 1995 Sri Lanka was the world's leading exporter of tea, (rather than producer) with 23% of the total world export, but it has since been surpassed by Kenya. The tea sector employs, directly or indirectly over 1 million people in Sri Lanka, and in 1995 directly employed 215,338 on tea plantations and estates. The humidity, cool temperatures, and rainfall in the country's central highlands provide a climate that favors the production of high quality tea. The industry was introduced to the country in 1867 by James Taylor, the British planter who arrived in 1852. (Photo by: Pictures From History/Universal Images Group via Getty Images)

Despite close to nine per cent decline in volumes, India’s tea export earnings for the January-October 2021 were up 2 per cent at $576.73 million, over the same period during the previous year ($564.09 million). This was mainly on account of an 11 per cent increase in realisations during the period.

Cost of sea containers

According to the Tea Board’s latest data, Indian teas fetched an average export price of ₹270.52 a kg during January-October 2021 as against ₹243.12 a kg in the same period previous year. “Exporters had to raise the price in view of the sharp increase in the cost of sea containers”, Vairavan Lakshmanan, an exporter said. However, the higher price caused hesitancy among importers to purchase more volume.

According to the Tea Board, the volumes shipped dropped to 157.20 million kg (mkg) from 172.19 mkg in January-October 2020, posting a decline of 8.71 per cent. “The imposition of lockdown in various stages in many countries in the wake of Omicron had affected tea shipments further in November and December”, Vairavan said.

However, in view of higher price, the overall earnings rose despite a fall in volume shipped. According to Tea Board, the overall earnings from exports increased to ₹ 4,252.55 crore from ₹ 4,186.23 crore in January-October 2020, marking a gain of 1.58 per cent.

The same trend was witnessed in the shipments in both North and South India. In the North, the volume shipped (88.48 mkg) dropped by 11.98 per cent but the price fetched (₹ 306.60 a kg) rose by 14.25 per cent resulting in the overall earnings (₹ 2,712.84 crore) to rise by 0.57 per cent.

In the South, exported volume (68.72 mkg) dropped by 4.12 per cent when the price fetched (₹224.06 a kg) rose by 7.87 per cent resulting in the overall earnings (₹ 1539.71 crore) to rise by 3.43 per cent.

Published on January 4, 2022 16:39
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