Iran gives green light for Ceylon Tea bags

By Shirajiv Sirimane

Sri Lanka has received the green light to export tea bags to Iran from next year. The country is presently exporting tea to Iran in bulk form and retailers in Iran re-pack them under their brand names, erasing the Sri Lankan identity. This also shaves off profits for the island.Minister of Plantation Industries Mahinda Samarasinghe met the Minister of Economic Affairs in Iran recently and obtained the clearance to export tea bags.

Minister Samarasinghe said due to this, firstly the ‘Ceylon Tea’ brand name would be established in Iran. Secondly it would increase tea export earnings.

“We send tea in large bags and someone else in Iran packets and brands it,” he said.Under this scheme, Sri Lankan tea exporters to Iran would, for the first time, get the opportunity to carry out value addition to tea in Sri Lanka, export them and earn larger volumes in foreign exchange.

The Minister also said that Sri Lanka’s tea export earnings reached Rs. 124 billion during the first 10 months of this year. This is a 15 percent increase over the corresponding period last year.

“Another area for serious concern with regard to our tea trade is its dependence on bulk teas. The time has come for us to increase the export of teas in value added form,” he said.

By emphasising on bulk teas, Sri Lanka not only loses revenue, but also allows room for others to blend our teas, superior in all aspects, with inferior origins and sell them as their own blends to compete with our products.

“This situation must be addressed. Our policy is to ensure that a major quantity of our teas find markets in value added form. We can certainly look at what kind of incentives should be provided to the industry for this purpose”, he said.

“During the conflict period, the tea industry suffered severely from the loss of the country’s image internationally, a situation which had a negative impact on export earnings. Today, in peace times, we are in an excellent position to re-capture our traditional position as a vibrant democracy and a peace-loving country,” the Minister said.

He said, despite the gloomy and bleak outlook last year, it is an achievement that Sri Lanka was able to record the highest ever tea prices in its history. However, we should not be complacent as we have many more challenges confronting us.

“The major challenge confronting the tea industry today is to retain its preferred production targets and maintain the quality which is synonymous with “Ceylon Tea”.

“With regard to production targets, our share in the world tea market, percentagewise, has declined over the last half a century to almost half of its original share.

This has been due to aggressive competition from other tea producing countries and the low rate of replanting and equally low productivity and of course the high cost of production and the absence of an aggressive marketing and promotional strategy for “Ceylon Tea.”

“In the next few years, we will give priority to a vigorous program of replanting, infilling, factory modernisation and post-harvest quality improvements. Large extents of aging tea bushes will be replaced with high yielding tea varieties recommended by the Tea Research Institute of Sri Lanka.

“It is of serious concern that our teas have lost out internationally due to the export of teas which do not meet the quality requirement that buyers and consumers expect, despite efforts of the Sri Lanka Tea Board to ensure the quality of tea exported. This situation must be rectified without delay”.

Sri Lanka should not allow our competitors to overtake us in this race by offering substandard teas.

The Sri Lanka Tea Board and the private sector must work together to ensure the good name of our teas.

“I am also focusing on legislative enactments concerning tea so that the laws can be brought in line with the new objectives. A committee has already been appointed to do this”.

“The country also has to look at tariff and non-tariff barriers that are now in place in quite a number of buyer countries and negotiate a way out”, the Minister said.

“We should also be mindful of the significant contribution made by the tea smallholder sector to national production and their future role in sustaining the industry and our social responsibility to ensure their livelihood improvement,” he said.