May 23, 2012 / 9:59 AM / in 5 years

Sri Lanka's April tea output slips after bad weather

COLOMBO, May 23 (Reuters) - Sri Lanka's tea production fell
2.1 percent in April from a year earlier due to bad weather and
a long holiday that month, the state-run tea board said on
Wednesday.	
    Sri Lanka's April tea output was 29.33 million kg compared
with 29.97 million kg in April 2011. 	
    Production in the first four months dropped 3.9 percent to
104.15 million kg from 108.37 million in the same period last
year, mainly due to continued drought.	
    High grown tea output, which accounts for around a fourth of
total production, fell as much as 12 percent in April, Tea Board
data showed.	
    "The drop is mainly due to the drought prevailing in the
high grown areas and fewer working days due to the festival
season in April," Sri Lanka Tea Board Director General H.D.
Hemarathna told Reuters.	
    The state-run body expects 330 million kg will be produced
this year, slightly higher than last year's 328.37 million kg,
and it sees 2012 export revenue surpassing last year's record
$1.5 billion due to higher prices. 	
    Revenue from the island-nation's top agricultural export
commodity fell 15.5 percent to $209 million in the first two
months of 2012 compared to a year ago, the latest central bank
data showed. 	
    Sri Lanka's tea output hit a record 331.43 million kg in
2010.	
    Analysts say the earnings outlook for 2012 is still unclear
due to a possible dip in exports to Iran, which buys a fifth of
Sri Lanka's tea directly. Local banks have been reluctant to
finance the industry fearing consequences from impending U.S.
sanctions on Tehran.	
    Other countries in the Middle East are also major buyers,
but political turmoil may limit their appetite for Sri Lankan
tea, traders say.	
    Tea is one of the $59 billion economy's main foreign
currency earners, along with remittances, garment exports and
tourism.	
    The following table shows Sri Lanka's April tea output (in
kg):        	
    	
                    April                     Jan-April
               2012         2011         2012          2011
 High Gr     7,232,952   8,220,468    24,482,553   28,328,531
 Medium Gr   5,321,069   4,874,784    17,513,296   17,216,486
 Low Gr     16,776,374  16,876,690    62,151,532   62,827,398
 Total      29,330,395  29,971,942   104,147,381  108,372,415
 	
($1 = 129.9000 Sri Lanka rupees) 	
    * For related news and prices, click on the codes in 	
brackets:  	
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    Colombo tea auctions   	
    Calcutta cash chain  <0#TEA-CCU>  	
    Kenya cash chain     <0#TEA-KE>  	
    Landed averages      <0#TEA-LND>  	
     	
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 (Reporting by Ranga Sirilal; Editing by Shihar Aneez & Kim
Coghill)

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