Sri Lankan tea production fell 44 percent in March compared with a year earlier on bad weather and low fertiliser usage, the Sri Lanka Tea Board said on Monday. Tea output fell to 18.16 million kg from 32.44 million kg in March 2008. "Weather conditions had affected tea output.
Drought and the poor application of fertiliser are the main reasons for the drop," said Lalith Hettiarachchi, chairman of the Sri Lanka Tea Board. "With a fertiliser subsidy announcement in the last budget, planters had not bought fertiliser in the latter part of 2008 and first part of 2009 expecting prices to come down. Because of that they were unable to apply fertiliser," Hettiarachchi said.
Output in the January-March period fell 41.55 percent to 48.79 million kg from 83.47 million kg a year earlier, when favourable weather and better fertiliser usage boosted production. Output rose 4.6 percent to a record 318.5 million kg last year, surpassing its previous high of 317.2 million kg in 2005.
Earnings from tea exports also hit a record high of $1.27 billion last year from $1.02 billion in 2007. Tea is one of Sri Lanka's main foreign currency revenue earners, after garment exports and remittances. The $40 billion economy's tea production and export revenue are expected to fall to multi-year lows in 2009 due to drought, low fertiliser usage and low global demand, the tea board said in March.
Sri Lanka's tea exports to the Middle East and Russia, which buy 75 percent of its total production, have slowed as credit dried up after the global financial crisis. These markets have recovered and global tea prices have picked up, and Sri Lanka's tea industry should recover towards the end of 2009, the tea board has said.