Unmanufactured tobacco and refuse market in Sri Lanka

Earlier Report Observations

The market for unmanufactured tobacco in Sri Lanka expanded from 9 483 tonnes in 2018 to 11 141 tonnes in 2019, driven largely by rising beedi production which increased demand for raw tobacco leaf. This growth was interrupted in 2020 when the COVID-19 pandemic reduced economic activity and pulled market volume down to 10 600 tonnes.

Post-pandemic recovery lifted the market to 11 695 tonnes in 2021, but a sharp drop followed in 2022 to 8 692 tonnes after the government raised excise taxes repeatedly, making legal cigarettes more expensive and dampening demand for tobacco leaf. The market partially rebounded to 10 419 tonnes in 2023 even as authorities banned the sale of certain flavoured cigarette products, indicating some adaptation in the supply chain.

Production unmanufactured tobacco and refuse in Sri Lanka

In kind, 2017-2020, t

Top producers of unmanufactured tobacco and refuse, 2017-2020

World map of production of unmanufactured tobacco and refuse, 2017-2020

In Sri Lanka, production of unmanufactured tobacco and refuse reached 9 225 tonnes in 2020, marking a slight decline of 2.7% compared to the previous year. Over the period from 2017 to 2020, production grew by 29.8%, with an average annual growth rate of 9.1%. The lowest production level was recorded in 2018 at 5 903 tonnes, while the peak occurred in 2019 with 9 480 tonnes. The most significant decrease was observed in 2018, falling by 16.9%, whereas the largest increase took place in 2019, rising by 60.6%.

Annual dynamics of production in Sri Lanka in kind, 2017-2020, t

Exports unmanufactured tobacco and refuse from Sri Lanka

Exports in kind, t

Sri Lanka's exports of unmanufactured tobacco and refuse increased for the second consecutive year in 2020, reaching 1 235 tonnes, which represents a 2.5% rise from the previous year. Between 2017 and 2020, overall exports declined by 5%, translating to an annualized decrease of 1.7%. The lowest export volume was recorded in 2018 at 1 192 tonnes, with the most substantial drop occurring that same year, falling by 8.3%.

Annual dynamics of product's exports from Sri Lanka in kind, 2017-2020, t

From 2017 to 2020, Belgium, Italy, and Hungary were the primary destinations for Sri Lanka's unmanufactured tobacco and refuse exports, accounting for 61.4% of total export volume. Belgium led with 30.0% of exports, followed by Italy at 15.8% and Hungary at 15.7%.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Sri Lanka in kind, 2017-2020

Exports in value, K $ US

Market performance showed noticeable fluctuations during the period. Export volumes peaked in 2018 and reached their lowest point in 2020, with a 2.6-fold difference between these years. In 2020, the value of foreign supplies of unmanufactured tobacco and refuse from Sri Lanka amounted to 30 157 thousand US dollars, reflecting a 15.2% decrease year-over-year. The highest value was recorded in 2018 at 78 221 thousand US dollars. The most significant decline occurred in 2019, dropping by 54.5%, while the largest increase was in 2018, rising by 111.2%.

Annual dynamics of product's exports from Sri Lanka in value, 2017-2020, K $ US

Between 2017 and 2020, Belgium, Hungary, and Indonesia were the key partners in terms of export value, collectively representing 82.5% of total flows. Belgium accounted for 44.5% of exports in value terms, Hungary for 29.7%, and Indonesia for 8.3%.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Sri Lanka in value, 2017-2020

Imports unmanufactured tobacco and refuse to Sri Lanka

Imports in kind, t

Sri Lanka's imports of unmanufactured tobacco and refuse declined for the second consecutive year in 2020, totaling 2 611 tonnes, which is an 8.9% decrease from the prior year. Over the 2017-2020 period, imports fell by 25%, with an average annual decline of 9.2%. The highest import volume was recorded in 2018 at 4 772 tonnes. The most substantial decrease occurred in 2019, dropping by 39.9%, while the largest increase was in 2018, rising by 37.0%.

Annual dynamics of product's imports to Sri Lanka in kind, 2017-2020, t

From 2017 to 2020, Indonesia, India, and Italy played leading roles in Sri Lanka's imports of unmanufactured tobacco and refuse by volume, jointly accounting for 59.0% of total flows. Indonesia contributed 36.0% of imports in kind, India 12.0%, and Italy 11.0%.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Sri Lanka in kind, 2017-2020

Imports in value, K $ US

Cross-border shipments of unmanufactured tobacco and refuse to Sri Lanka increased for the second consecutive year in 2020, reaching 61 044 thousand US dollars, which represents a gradual gain of 6.4% year-over-year. The lowest value was recorded in 2018 at 50 747 thousand US dollars. The most significant decline occurred in 2018, falling by 17.1%, while the largest increase was in 2019, rising by 13.1%.

Annual dynamics of product's imports to Sri Lanka in value, 2017-2020, K $ US

Over the 2017-2020 period, Indonesia, Ecuador, and the United States consistently held leading positions in the country structure of imports by value, jointly accounting for 71.5% of total flows. Indonesia represented 48.7% of imports in value terms, Ecuador 14.7%, and the United States 8.1%.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Sri Lanka in value, 2017-2020