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Global Tea Index – Sri Lankan tea prices weighing on global prices

June 28, 2019

1 mins read

Mintec Global Tea Index decreased by 8% m-o-m in June (up to 27th June) mainly driven by slumping prices in Sri Lanka.

Sri Lankan tea prices dropped by 14% m-o-m driven by ample availability of supplies for exports in June 2019. If production from January to April 2019 decreased by 1% y-o-y at 73m kg according to ITC, May 2019 output rebounded by 5% compared to May 2018, balancing the lack in volumes during Q1 2019. According to Sri Lankan Tea Exporter Association, May 2019 output is the record high monthly production since May 2012. The bearish trend on Sri Lankan prices has also been driven by healthy exports level, showing an increase by 3.5m kg in May 2019 (compared to May 2018) at 26.6m kg. January-May 2019 exports from Sri Lanka jumped at 121m kg, up by 7% y-o-y.

Indian prices increased seasonally by 2% m-o-m in June, balancing the impact of bearish prices in Sri Lanka. Prices in June 2019 in India have shown improvement compared to June 2018, showing 2% increase. Low tea output following the first flush in India, which plummeted by 37% y-o-y for the January-April 2019 period (ITC), is the main reason behind this price increase. The weak demand in Q2, mainly from Pakistan as the depreciating currency weighted on the importers, has been counterbalancing the bullish prices trend.

Market Outlook Sample

Topics: Beverages
Anais Divanach
Anais Divanach

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