Sri Lanka’s tea production and exports fell sharply in November 2008 but export earnings in the 11 months were ahead of the year before and a record annual crop is expected, brokers said.

Tea production in November 2008 at 24.6 million kilos was the lowest since 1999 as producers cut output after prices crashed, brokers Asia Siyaka Commodities said.

The drop in production came mainly from the low grown sector produced mainly by small farmers in the south which fell by almost a quarter compared with the same month the previous year.

"National production would have been much lower if the high grown figure had not increased 28 percent from 6.3 million kg in November 2007 to 8.1 million kg in 2008," the brokers said in a market report.

Mid grown and low grown production fell largely because small farmers curtailed production when the market crashed and because low application of fertilizer and pruning of fields restricted supply.

December tea production will also be lower and lower crops can be expected in the first quarter of this year, Asia Siyaka Commodities said.

But they said production for the January - November 2008 period at 299 million kg was eight percent higher than the 275.7 million kg in the same 2007 period.

"Even if December is a low 20 to 22 million kg the country should achieve a record annual crop in excess of the 2005 figure of 314.8 million kg," the brokers said.

November tea exports fell to a six-year low of 22.3mn kg but export earnings in January-November were 1.18 billion dollars against 0.92 billion dollars the year before.

"A strong eight month performance of 293.1 million kg has kept the country three percent ahead of the 2007 figure of 284 million kg," Asia Siyaka Commodities said.

"Since September Sri Lanka was struggling to match the 2007 numbers and we do not see a final figure for 2008 getting close to the highest quantity of 327 million kg (in exports) achieved back in 2006."