Tea prices extend slide for third straight month in March as Sri Lanka’s national tea auction averages continued to weaken, reflecting sustained downward pressure from global demand conditions and currency-related factors.
Tea prices extend slide for third straight month in March amid declining averages
Tea prices extend slide for third straight month in March, underscoring a continued softening in Sri Lanka’s tea market following a peak recorded in late 2025. According to Forbes & Walker Research, the national sales average declined steadily over the first quarter of 2026, reflecting both domestic and international market pressures.
The national average price fell to Rs. 1,144.23 ($3.63) in March, marking a decrease of Rs. 7.88 from February’s Rs. 1,152.11 ($3.72) and Rs. 1,164.54 ($3.76) in January. This represents a cumulative drop of Rs. 57.35 from the December 2025 peak of Rs. 1,201.58 ($3.89), indicating a clear downward trajectory over the past three months.
On a year-on-year basis, the March 2026 average declined by Rs. 39.53 and $0.36 compared to Rs. 1,183.76 ($3.99) recorded in March 2025. The decline highlights persistent challenges within the Sri Lanka tea industry, particularly in maintaining export value amid fluctuating global demand and pricing pressures.
Cumulatively, the national sales average for the first three months of 2026 stood at Rs. 1,153.25 ($3.70), reflecting a decrease of Rs. 26.07 compared to Rs. 1,179.32 ($3.98) in the corresponding period of 2025. This trend suggests that the weakness in tea prices is not isolated but part of a broader adjustment in market conditions.
A closer look at elevation categories reveals mixed performance, although all segments recorded negative variances in dollar terms. High Grown teas experienced a month-on-month decline of Rs. 8.31 to Rs. 1,150.71 ($3.65). Despite this, prices in rupee terms showed a marginal increase of Rs. 5.72 compared to March 2025, although dollar values declined by $0.21. On a year-to-date basis, High Grown teas recorded a gain of Rs. 32.25, suggesting some resilience within this category.
Medium Grown teas presented a slightly different picture, registering a modest month-on-month increase of Rs. 5.72 to Rs. 987.09. However, in dollar terms, prices declined by $0.04, indicating the influence of currency movements. Year-on-year, Medium Grown teas saw a significant drop of Rs. 69.21 and $0.43, reflecting weaker demand conditions. On a cumulative basis, the segment remained lower by Rs. 55.10 for the year to date.
Low Grown teas, which are a key component of Sri Lanka’s export portfolio, recorded a sharper decline. Prices fell by Rs. 13.95 month-on-month to Rs. 1,181.30 ($3.75). Compared to March 2025, this category experienced a decline of Rs. 55.02 and $0.42. On a cumulative basis, Low Grown teas were down Rs. 40.84, highlighting continued pressure in this segment.
Industry analysts point out that global market dynamics, including shifting demand patterns and currency fluctuations, have played a significant role in the recent decline. The stronger performance of the Sri Lankan rupee in certain periods, combined with softer demand in key export markets, has contributed to lower dollar returns across all elevation categories.
The ongoing decline also reflects broader structural challenges facing the Sri Lanka tea industry, including rising production costs, competition from other tea-producing nations, and evolving consumer preferences. Maintaining competitiveness in such an environment requires a focus on quality, branding, and value addition.
At the same time, stakeholders remain cautiously optimistic that market conditions could stabilise in the coming months. Seasonal demand patterns, coupled with potential improvements in global economic conditions, may provide some support to prices. However, much will depend on external factors, including geopolitical developments and currency movements.
Tea prices extend slide for third straight month in March serves as a reminder of the volatility inherent in commodity markets and the need for adaptive strategies within the sector. Exporters, producers, and policymakers will need to closely monitor trends and respond proactively to mitigate risks and capitalise on emerging opportunities.
As Tea prices extend slide for third straight month in March continues to shape market sentiment, the focus is likely to remain on improving efficiency, enhancing product differentiation, and strengthening Sri Lanka’s position in the global tea trade.