Strong international demand for tea in 2008 - Forbes & Walker

The Forbes and Walker Sri Lanka tea Review 2007 which analysed the tea statistics in 2007 and the first quarter 2008 forecasts a continued strong international demand for tea throughout 2008.

The report said that if producers maintain the quality of tea the price could be sustained at reasonable levels.

The demand for tea in the Middle East and Russia/CIS, the main markets of Sri Lanka is surging as a result of relative economic stability in these regions. These economies will remain stable as oil prices are expected to remain high.

Another important development is Russia’s entry to the WTO which would compel Russia to reduce import duties. Since Russia is the largest tea importer from Sri Lanka these developments would positively contribute to the tea industry, the report said.

The report also said that the developments in the Middle East markets would make a positive impact on tea demand. Liberalisation of markets such as Iran, Iraq and Libya has been supporting mainly our orthodox leafy/small leaf in the past decade.

Rising demand in China and India too will help to keep consumption in line with production.

The potential for black tea in the Chinese market if seriously pursued can be very encouraging, the report said.

World tea export in 2007 showed a 20.6 m/kgs reduction. Total exports of Asia have declined from 1041.9m/kgs in 2006 to 967.4m/kgs in 2007, mainly due to the decline in exports from Sri Lanka and India. Sri Lanka has emerged as the No.1 exporter in the Asian region whilst Kenya too has retained its position as the No.1 exporter from the African region, the report said.