Sri Lanka low grown tea recovery expected in 2019 despite Iran sanctions
May 26, 2019 07:56 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's low grown tea is expected to recover in 2018 despite sanctions on Iran, a top producer has said as a demand from countries that were hit by currency collapses in 2018 stabilizes, a producer has said.
"Key exporting markets such as Russia, Turkey and Iran are expected to increase their demand for tea," Tea Smallholder Factories, which accounts for over 5 percent of Sri Lanka's low grown tea production said.
"China has also been increasing black tea imports year on year and the trend is expected to continue in 2019, while Syria recovering from the crisis is expected to increase imports as well.
"The US sanctions on Iran will remain a challenge in the coming year."
Tea Small Holder Factories, operates 7 plants in mainly low grown areas, buying from a estimated 5.7 percent of total small farmers in the country.
In 2018, Sri Lanka's overall tea production had fallen 3 percent to 303 million kilograms, while low growns fell to 191 million kilograms from 197.
The Turkish Lira fell sharply in 2018, while disruptions were also seen in Russia, where the central bank also intervenes in the forex markets and then prints money, without free floating, leading to frequent economic instability.
Sri Lanka's rupee also collapsed while the central bank printed 246 billion rupees after intervening, which tends to push up the rupee price of tea.
But the national sale average had fallen by 36 rupees.
Sri Lanka had been hit by US sanction on Iran and chemical residues found in tea, after a ban on the use of glyphosate weedicide, the firm said.
In 2018, demand fro Syria may also recover, the firm said. (Colombo/May27/2019)