Tea is Sri Lanka's largest agricultural export and fetched $1.02 billion in 2007, its third highest foreign exchange earner after garments and remittances from Sri Lankans working abroad. The country is not likely to achieve its 2008 revenue and production targets, after demand and prices for Sri Lankan tea tumbled in the last quarter, with the slowdown possibly extending into 2009, Lalith Hettiarachchi, the head of Sri Lanka Tea Board, told Reuters in an interview on Friday. Production this year in Sri Lanka, the world's largest producer of black tea, would be between 305 and 310 million kg, lower than an estimated 320 million kg, while export revenue from tea would be $1.2 billion, a 20 percent drop from initial expectations, he said. "We will have at least 300 million kg in 2009, but the revenue would be less, and it can be less than even $1 billion."
Sri Lanka exported 319.7 million kilos of tea and earned an estimated 1.26 billion dollars in 2008, but industry officials said shippers may not have received full payment given the collapse of the market towards the end of the year. Brokers Asia Siyaka Commodities said in a market report that tea exports had done well in a "difficult year" with the volumes shipped being second only to the 327.4 million kilos exported in 2006. The country exported 309.8 million kilos in 2007.
"The value of exports is a record 137.6 billion rupees, up 21 percent, compared with a previous high of 113.5 billion rupees earned in 2007," they said in a market report. In US dollars terms the export value at 1.26 billion was higher than the record one billion dollars earned in 2007. But the brokers noted that exporters may not have received full payment. "Considering the disastrous fourth quarter of 2008 following the global credit crisis it is unlikely that the country would have received full proceeds as declared in the shipment data," Asia Siyaka Commodities said. "Our estimate of dollar earnings is based on approximate...
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