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Sri Lanka’s tea production is likely to pick up from around the second quarter of 2023 as trees respond to fertilizer applied after an agro-chemical ban ended, a top official said.
The effects of a chemical fertilizer ban under former President Gotabaya Rajapaksa’s government are still lingering in tea farms and bushes are still recovering from the lack of nutrition. The fertilizer ban was lifted in 2022 but supplies were limited amid forex shortages.
“We are talking about a tea bush that had little to no fertilizer for one and half years, some of them even for two years,” Tea Board Chairman Niraj de Mel told EconomyNext.
“Some private sector companies got it after the ban but it was also a very small percentage.
“Just because the fertilizer issue’s being sorted out, does not mean everything is sorted now.”
Sri Lanka tea production for January 2023 was 19.1 million kilograms down from 22.8 million kilograms a year ago. Tea exports were also down by 9.4 percent from a year ago to 17.56 million kilograms in January 2023.
The first three months may not indicate the response to fertilizer De Mel said but a recovery is likely to be seen later, on a lower base.
“So my outlook is in the second quarter, April, May or June should be better than last year,” he said.
“In the last year, April, May, June I think was a way lower than average, so you’re comparing a way lower than average against something that has shown an upward trend on that, but I will still be happy that it’s going on an ascending phase.”
In 2021, Sri Lanka produced 251 million kilograms of tea and the new target of 2023 is around 272-280 million kilograms, with an expected forex revenue of 1.4 billion US dollars.
Sri Lanka however may face pressure from buyers with several African countries entering the market at a lower rate, de Mel said.
Sri Lanka tea prices rose as much as 4.5 dollars a kilogram, led by Low Growns which rose to 4.8 dollars on average by October 2023 and has since fallen to around 4.2 dollars in early 2023.
Global commodity prices including coffee have fallen from the second half of 2022 after the US Fed started tightening monetary policy in March. (Colombo/Feb21/2023)
Source: https://economynext.com/sri-lanka-tea-production-likely-to-pick-up-in-second-quarter-112940/
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