Ceylon tea: Low growns prices dip amidst Iran unrest

Though Ceylon teas have seen decent demand at this week’s auction, there was a noted decline in pricing of Low Growns, typically exported to Iran and the Middle East, Forbes and Walker tea brokering had noted during the second sale of the year on the 12-13 of January.  

“Auction offering totalled 6.0 M/kg. There was fair demand mostly at easier rates. Less activity from Iran and the Middle Eastern markets following the recent restrictions in trading conditions,” the Weekly Market report said.

It further added that though High and Medium Grown CTC teas sold around at the same levels of the previous week, Low Grown types were sold up to Rs. 20 per kg lower than last week’s rate.

Roughly 2.4 M/kg of Low Growns were sold at the auction, with the Leafy category teas met with less demand, Semi-Leafy with fair demand and Tippy teas met with decent but lowered demand. 

“In the Tippy catalogue, a few well-made FBOP/FF1’s sold at last levels, whilst the balance in general declined. In the Premium catalogue, Tippy teas in general were substantially lower and were mostly unsellable due to a lack of suitable bids,” the report said.

While demand from export destinations such as the UK and Africa saw selective demand, South East Asian, Middle Eastern and Eurasian destinations were active at lower levels. “Selective demand from shippers to the UK, the continent and South Africa, whilst shippers to Japan, China, the Middle East and the CIS [Commonwealth of Independent States] were reasonably active mostly at lower levels.”

This development arises amidst Sri Lanka’s total tea production seeing only a marginal 0.57% increase in production in year-on-year terms in 2025, from levels recorded in 2024. According to production data of the Sri Lanka Tea Board, Sri Lanka produced 264.1 million kg in 2025, up by 1.5 million kg from 2024’s 262.6 million kg. 

According to the Department of Census and Statistics’ Gross Domestic Product by Production report for Q3 of 2025, Sri Lanka’s tea production segment contracted by 8.1% in volumes in Q3 alone, primarily due to long-running inabilities to recultivate plantations.

In the month of December Sri Lanka’s tea production contracted by 0.44 million kilograms, according to Forbes and Walker, with all elevations except for High Growns seeing declines in comparison to the same time period in 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.”

Source - The Morning