SRI LANKA TEA PRODUCTION - DECEMBER 2025 

Sri Lanka Tea Production for the month of December 2025 totalled 21.37 million Kgs, witnessing a decline of 0.44 million Kgs vis-à-vis 21.81 million Kgs of December 2024. All elevations except for the High Grown elevation witnessed a decline in comparison with the corresponding month of 2024, whilst the Green Tea production has shown a slight increase vis-à-vis December 2024.

January-December 2025 cumulative production totalled 264.12 million Kgs, recording an increase of 1.43 million Kgs vis-à-vis 262.69 million Kgs of January-December 2024. All elevations recorded an increase in comparison with the corresponding period of 2024.

Compared to 256.09 million Kgs of January-December 2023, cumulative production of 2025 shows an increase of 8.03 million Kgs. On a cumulative basis, all elevations except for the High Grown Elevation shown positive variances when compared with the same period in the year 2023.

The available tea crop figures from January to December 2025 are appended below (in MT).  

SRI LANKA TEA EXPORTS - DECEMBER 2025 

Tea Exports for the month of December 2025 totalled 17.87 million Kgs, showing a decline of 4.70 million Kgs vis-à-vis 22.57 million Kgs of December 2024. All categories have recorded negative variances in comparison with the corresponding period of the previous year.  FOB value in December 2025 was recorded at Rs. 1,831.11, an increase of Rs. 130.06 YoY compared to Rs. 1,701.05 of December 2024, whilst in USD terms an increase of USD 0.09 was recorded in comparison with the corresponding period in the year 2024

January-December 2025 cumulative exports totalled 257.44 million Kgs, recording a positive variance of 11.65 million Kgs vis-à-vis 245.79 million Kgs of January-December 2024. All segments, except for Bulk Tea have recorded positive variances against the same period of the previous year.  FOB value for the period stood at Rs. 1,760.70, a decrease of Rs. 2.91 (increase of USD 0.01) vis-à-vis Rs. 1,763.61 of January-December 2024. Bulk and Packeted Teas recorded negative variances, whilst Tea Bags, Instant and Green Tea categories recorded gains in LKR terms in FOB value. In USD terms in all categories except for Tea in Bulk and Tea Packets showed an increase when compared to the corresponding period in 2024

Iraq ranks at No. 1 amongst major importers of Ceylon Tea with a total of 39.36 million Kgs, an increase of 14.9% YoY in January-December 2025 against previous year’s 34.26 million Kgs. Russia ranked in 2nd Place with 21.59 million Kgs, despite a decline of 13.6% in comparison with previous year closely followed by Türkiye at 3rd Place recording 21.27 million Kgs, an improvement of 20% followed by Libya who at 4th place witnessed 83.9% increase YoY with 18.93 million Kgs vis-à-vis 10.29 million Kgs recorded in 2024. The U.A.E secured 5th place with 18.32 million Kgs (13% decline YoY), whilst Chile recorded 11.09 million Kgs (28.5% increase YoY) surpassing China who has recorded 10.42 million Kgs (9.9% decrease YoY). Iran secured 8th Place with 10.39 million Kgs followed by Azerbaijan and Saudi Arabia with 8.91 million Kgs and 8.73 million Kgs respectively.

The available tea crop figures from January to December 2025 are appended below (in MT).  

MAJOR IMPORTERS OF SRI LANKA TEA – DECEMBER 2025/2024 - in MT 

MARKET OUTLOOK FOR 2026

The year 2026 emerges as a period of significant hope and expectation, both for the tea industry and the nation at large, following the unprecedented disruptions caused by Cyclone Ditwah in late 2025. While the storm inflicted severe damage on the High and Mid Grown sectors impacting infrastructure and worker engagement, the industry has demonstrated its characteristic resilience. Efficient evacuation and rapid restoration of logistical aspects are already underway, ensuring that the backbone of the Ceylon Tea supply chain remains operational.

The tea sector continues to serve as a stabilising force for the national economy, fueled by a unique combination of fertile land and a dedicated workforce. Despite past challenges, this sector remains the primary vehicle for projecting Sri Lanka’s ‘goodwill’ to the global market through its superior tea supply.

Global Supply and Demand

In analysing global tea production statistics, it is evident that the African Region which continued to record steady increases in production over the past several years, shows a year-on-year deficit of approximately 40 million Kgs (2024 vs. 2025).
Other notable declines year-on-year would be from Bangladesh and Malawi, whilst Sri Lanka and India are likely to record marginal increases.

Based on tea production statistics available up to October/November 2025, show a global deficit of around 45 million Kgs year-on-year. It would be relevant to note that this shortfall comprises of mainly teas of CTC origin and therefore, would have a minimal impact on the Sri Lankan tea industry.

Expectations of Sri Lanka’s tea crop recording a 280 million Kgs in 2025 failed to be a reality, primarily following unfavourable weather conditions and is most likely to end the year around the 262/263 million Kgs in keeping with tea production in the year 2024.
Amidst this declining trend in production of Ceylon Tea, global tea production interestingly, recorded a 1 billion Kgs increase in a 5-year period ending 2024. As you would observe from the graph below, a greater percentage of the production has been absorbed by the producer countries itself. Thereby, teas available for exports from producer countries have more or less remained flat.

As a prime supplier of Orthodox tea to the world market, the lack of availability in recent times has driven prices well above other origins and to some extent making Ceylon Tea expensive and uncompetitive. Capitalizing on these shortfall producer countries in the African Region, in particular, in recent times are making significant in-roads in converting their CTC factories into an Orthodox tea manufacturing process.

The important question and the unknown factor would be whether Ceylon Tea will lose its price premium hitherto enjoyed over other origins over a period of time.

In order to mitigate any adverse consequences, it’s important that the industry sets out clear directions and guidelines in improving the overall quality of Ceylon Tea both in terms of qualitative and purity aspects re-establishing Ceylon Tea as a premium product and equally importantly, as the cleanest tea in the world.

Innovation and Modern Consumption Trends

Sri Lanka is strategically positioned to lead the premium extraction market, leveraging unique aromatic profiles that competitors cannot replicate. Rising demand for ‘Cold Extraction’ technology – which preserves delicate floral notes – is a key trend for 2026.

The Bubble Tea Surge: Global franchises are increasingly adopting Ceylon Tea as a ‘premium’ base, utilizing its heritage as a marketing tool to distinguish their products from generic alternatives in a market projected to grow significantly through 2026.

From a Sri Lankan perspective, as a prime supplier of Orthodox tea and considering the short supply situation over a period of time and the overall improvement in the quality of teas from the Western Slopes experiencing its traditional quality season, is likely to experience a buoyant market in January/March 2026.

On a cautiously optimistic note, we do not expect a dramatic change in tea prices until around mid-2026, whilst we could expect a correction based on improvement in the supply position which is likely to emerge commencing April-May 2026.
Other factors for due consideration would be the likely weakening of the Sri Lankan Rupee having a positive impact on rupee tea prices and a steady continuation of tea purchases by Iran for ‘Tea for Oil’ barter agreement.

Amidst a positive outlook for tea prices from a sustainability perspective, the industry continues to be challenged with ‘climate change,’ labour shortages, escalating costs and low productivity, which would continue to undermine the competitiveness due to the higher average production cost compared to other larger producer/exporter countries. In our view, the industry as a matter of urgency needs to adopt and mitigate the adverse effects of ‘climate change.’ Rehabilitating and improving the water retention capacity of the soil should be a priority followed by a systematic in-filling programme carried out in the short term. In the medium term, a structured re-planting programme should be pursued in a manner in which a high degree of mechanisation can be achieved in agricultural practices, particularly the harvesting function. Therefore, the global competitiveness of ‘Ceylon Tea’ in the short to medium term will depend on how quickly the industry addresses these vital issues.

As we have reiterated in our previous reports and in summary, whilst economic challenges and weather uncertainties could impact the overall market dynamics, differentiation would be a key factor for the future of Ceylon Tea. The industry needs to capitalise on the strengths whilst continuing to be a global leader in a premium and sustainable tea.

(Forbes & Walker Tea Brokers (Pvt) Ltd)