Sri Lanka’s tea industry, long regarded as one of the country’s most dependable foreign exchange earners, is facing renewed turbulence amid escalating geopolitical tensions and persistent economic fragility. The latest export figures reveal a worrying slowdown in tea shipments during the first four months of 2026, exposing the sector’s vulnerability to disruptions in global trade and shipping networks.
Data compiled from Sri Lanka Customs and analysed by Asia Siyaka Research indicate that tea exports declined by 1.6 percent year-on-year in April 2026, falling to 17.9 million kilograms compared to 18.2 million kilograms recorded during the same month last year. The broader January-to-April performance paints an even more concerning picture, with total exports dropping by 4 percent to 78.3 million kilograms from 81.3 million kilograms in the corresponding period of 2025.
Industry analysts attribute much of the downturn to disruptions in maritime transport following the intensification of the US-Iran conflict earlier this year. As tensions spread across major shipping corridors linking Asia with the Middle East and North Africa, delays in cargo movement and rising freight uncertainties severely affected Sri Lanka’s tea trade. Several of the island’s traditional buyers are concentrated in these regions, making the industry particularly susceptible to instability in global shipping routes.
The financial impact has been equally significant. Export earnings from tea fell by 5.64 percent during the first four months of 2026, declining to 451 million US dollars from 478 million dollars a year earlier. The average Free on Board value per kilogram also slipped from 5.88 dollars to 5.76 dollars, indicating mounting pressure on export profitability.
Despite the overall downturn, some export destinations displayed resilience. Iraq retained its position as Sri Lanka’s leading tea buyer, importing 10.2 million kilograms, although volumes were lower than last year’s 11.5 million kilograms. Türkiye emerged as a rapidly growing market, with imports more than doubling to 9.7 million kilograms, partly due to alternative trade routes adopted amid regional shipping disruptions. Russia maintained relatively stable import volumes despite continuing sanctions-related payment complications, while Azerbaijan recorded a notable increase in purchases.
Economists warn that Sri Lanka’s tea sector is increasingly exposed to external shocks beyond its control. Rising shipping costs, fluctuating currencies, global inflationary pressures and fragile consumer demand in key markets continue to strain exporters already operating under narrow profit margins. The country’s broader economic challenges, including debt pressures and limited foreign reserves, further complicate efforts to stabilise export industries.
Tea remains one of Sri Lanka’s most iconic exports and generated more than 1.5 billion US dollars in revenue in 2025. However, unless global trade conditions improve and the industry diversifies its export markets, analysts caution that Sri Lanka’s tea economy may continue to face prolonged uncertainty in the months ahead.
By a Special Correspondent