Colombo, Oct 22 - Sri Lanka will only hit the low end of its 2008 tea earnings forecast of between $1.2-$1.5 billion, owing to less demand from customers in the Middle East and Russia, the island nation's tea board said on Wednesday.
"We won't be able to reach $1.5 billion anyway. It could go up to $1.2 billion, due to low demand for tea from Middle East and Russia," Sri Lanka Tea Board Chairman Lalith Hettiarachchi told Reuters.
Sri Lanka, one of the world's top black tea producers, last year earned a record $1.02 billion from tea, the third-highest foreign exchange earner after garments and remittances.
The Middle East and Russia are the main buyers for low-grown Sri Lankan tea, buying around 75 percent of the total exports. Low-grown tea is classified as any that is grown at altitudes of 2,000 feet (609 metres) or less.
"Middle East buyers are very cautious and they are just waiting for tea prices to further reduce. Russia has reduced buying due to the global recession," Hettiarachchi said.
At Tuesday's auction, almost 60 percent of the low-grown tea, which accounts for around 60 percent of total tea production in Sri Lanka, had to be withdrawn due to lower demand, he said. ($1=108.00 Sri Lankan rupees)