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| Sunday, 10 July 2005 |
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Ceylon tea - bullish market for 2005 A bullish market for Ceylon tea for the year 2005 is foreseen, by the Forbes and Walker Tea Review (2004) released last week. Among the plus factors for the Sri Lanka tea industry is a global shortfall of good quality orthodox teas, the type Sri Lanka produces. On the global supply factor, there is oversupply of the other type, being CTC teas. Auguring well for Sri Lanka, who last year was the world's second largest exporter, is that there is a global growth of tea consumption, the (annual) Sri Lanka Tea Review 2004 says. This is while supply and demand is almost reaching equilibrium, it is found. The recent free trade agreement with Pakistan is seen as good and so is the liberation of imports into Iran and the reduction of duty to Egypt. Another plus point for Sri Lanka's tea exports is the anticipated growth in the economy of Russia and the CIS countries, which nations have in recent years emerged the largest importers of Ceylon tea. Adding to Sri Lanka's good fortunes for the current year is that the Middle East, another growing consumer of Ceylon tea is exhibiting economic growth. World tea production of 3.15 million tonnes shows a marginal growth when compared to 3.14 million tonnes during 2003. The largest contributor towards this growth has been Kenya which recorded a substantial increase year on year. Sri Lanka has been the only other significant contributor towards the growth of the world's tea production. A total of 1.4 million tonnes of exports has been recorded during the year 2004. This shows a growth when compared with the 1.3 metric tonnes exported during the year 2003. Kenya for the first time has overtaken Sri Lanka as the largest exporter of tea in the world. The approximate 326,000 metric tonnes exported by Kenya during 2004 shows a growth of approximately 21 percent for the past few years. Sri Lanka, the world's second largest exporter shows a marginal decline in exports from 291,000 tonnes in 2003 to 290,000 tonnes in 2004. Indonesia has recorded a growth from 88,000 tonnes in 2003 to 96,000 tonnes in 2004. China and Vietnam have been the other destinations to show a significant growth during the past few years. For 2004, 2,286,000 tonnes of tea have been supplied to the global market of which 2,262,000 tonnes has been absorbed leaving a marginal surplus of 21,000 tonnes, according to the Annual Bulletin of Statistics of the International Tea Committee. This shows a slight reduction in the surplus when compared with the 29,000 tonnes surplus reported during 2003. The salient feature is the apparent growth in the global consumption of tea, year on year. EL |
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