Colombo, Sri Lanka – August 25, 2026 – Sri Lanka’s vital tea industry is currently navigating a dynamic and often challenging market landscape, as detailed in Forbes & Walker Tea Brokers’ comprehensive report for the sales conducted on August 24th and 25th, 2026. The latest weekly market review reveals a mixed bag of demand across various tea categories, coupled with significant shifts in national production and export figures.
Overall Market Performance and Auction Dynamics
The auction for Sale No. 33 saw a total offering of 5.43 million kilograms, with overall demand described as “Fair general.” However, a closer look reveals diverging trends across different segments. Ex-Estate teas, comprising 0.83 million kilograms, faced a “Bearish” sentiment, while High & Medium, Leafy, Semi-Leafy, Tippy/Small Leaf, and Premium Flowery categories (collectively accounting for substantial quantities) experienced “Fair” demand. Off-Grades and Dusts encountered “Irregular” demand.
A key observation from the Forbes & Walker report highlights a continued bearish market sentiment for Orthodox and Rotovane BOP/BOPF teas, leading to heavy withdrawals. Quality concerns were also noted in Ex-Estate offerings, with a greater availability of fair average quality teas rather than premium lots. Better Western BOPs saw declines of Rs. 50 per kilogram or more, with only a few invoices holding firm or showing marginal gains. Nuwara Eliya BOPs were notably absent, while Uva and Uda Pussellawa BOPs were largely unsold due to bids falling significantly below previous week’s levels.
In contrast, the Low Grown sector, which accounted for approximately 2.3 million kilograms, witnessed fair demand across all categories. Leafy and Semi-Leafy varieties like BOP1’s, OP’s, and PEK’s were generally firm, with OP1’s even seeing an appreciation. Tippy teas, including FBOP’s and FBOP1’s, were generally dearer, though Premium Tippy teas eased.
International buyer activity was varied. Shippers to the UK and the Continent, along with South Africa, appeared largely inactive. Japan and China were less forceful, often operating at lower price levels, a trend also observed with shippers to the CIS and Middle East regions.
National Tea Production: A Mixed Picture
Sri Lanka’s tea production figures for July 2026 recorded 21.26 million kilograms, a slight decrease of 0.23 million kilograms compared to July 2025. While High Growns showed an improvement of 0.32 million kilograms and Green Tea recorded a gain of 10.69%, Medium Growns and Low Growns experienced a decline year-on-year. Cumulatively, from January to July 2026, total production stood at 153.14 million kilograms, indicating a negative variance of 4.12 million kilograms against the corresponding period in 2025. High Growns and Green Tea segments continued their positive trend, but Medium Growns and Low Growns reported negative variances.
Export Trends and Top Importers
Tea exports for July 2026 totaled 20.41 million kilograms, marking a decline of 3.63 million kilograms compared to July 2025. The cumulative exports for January-July 2026 reached 143.51 million kilograms, a decrease of 7.34 million kilograms year-on-year. While Instant Tea recorded positive variances, most other categories saw declines in volume.
In terms of value, the Free On Board (FOB) value for July 2026 was recorded at Rs. 1,921.95 per kilogram, a gain of Rs. 155.44 year-on-year. However, in USD terms, the FOB value saw a negative variance of USD 0.15. The cumulative FOB value for January-July 2026 increased by Rs. 77.65 in LKR terms but declined by USD 0.16 compared to the previous year, highlighting the impact of currency fluctuations.
Türkiye continued its strong performance, maintaining the top position among major importers of Ceylon Tea in July 2026, with imports of 24.76 million kilograms, a remarkable 138% increase year-on-year. Iraq followed at second place with 14.42 million kilograms, despite a significant 36% decrease. Russia secured third place with 13.35 million kilograms, showing a modest increase. Other key importers in the top ten included Azerbaijan, China, Libya, Jordan, Chile, Saudi Arabia, and Syria.
Crop and Weather Update
The period between August 19th and 24th, 2026, saw showery conditions in the Western and Nuwara Eliya regions, leading to a decrease in crop intake. The Department of Meteorology anticipates continued showers in these areas. The Uva and Uda Pussellawa regions experienced bright weather but are expected to face strong winds and thunderstorms in the coming week. Low Grown regions reported rain during the week, with more showers forecast.
Global Tea Market Snapshot
International tea auctions presented a mixed global outlook. The Mombasa auction (August 17-18, 2026) reported good general demand, with strong interest from Pakistan and Egyptian packers, though Russia showed reduced enquiry. Bangladesh (August 25, 2026) saw excellent demand for CTC Leaf teas, with brokens and fannings fetching higher prices, while dusts were slightly easier. Coonoor (August 21, 2026) reported good demand for CTC Leaf and Dust, with prices varying based on quality. Other markets like Kolkata, Cochin, Siliguri, and Guwahati generally indicated fair to good demand but with irregular or easier price levels for certain categories.
The coming weeks will be crucial for the Sri Lankan tea industry as it navigates fluctuating international demand, domestic production challenges, and evolving global economic conditions.
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