Lanka, the best tea export centre
by Lalin FERNANDOPULLE
Sri Lanka is the best export centre for tea in terms of speed of
delivery and services, said Chairman, HVA Group, Rohan Fernando.
He said the Rs. 1 billion Pure Ceylon Tea promotional fund set up
this year will be a huge boost to tea exports with more awareness and
demand for Ceylon Tea in the global market.
The Government set up the tea promotional fund to support indigenous
brand builders and stimulate growth in exports. Tea export revenue last
year was around US$ 1.3 billion and according to experts revenue this
year is expected to reach around US$ 1.5 billion.
Experts said that money from the tea Cess Fund was not ploughed back
to the industry and as a result adequate promotional activities were not
there. The fund provided around Rs. 35 million for brand building.
Fernando said achieving US $ 1.5 billion export revenue from tea this
year is not a difficult task provided there is sound marketing and
adequate promotion of the Ceylon Tea brand in the world market."Sri
Lanka has the potential to be a powerful player in tea exports with a
US$ 5 billion market share in the next five years.Increase in value
added exports and sound policies are crucial to garner a higher market
share in global tea exports", he said.
The world tea export market is 1.5 billion kilograms of which Sri
Lanka contributes around 300 million kg each year accounting for around
18 percent of the global market share.
Sri Lanka’s value added tea exports is around 35 percent of which
around 20 percent comprises locally registered brands. A larger portion
of Sri Lanka tea exports is yet in bulk form.
Experts opine that with improvement to processing and packaging
technology and incentives to producers and exporters tea production and
export income should increase substantially.
Sri Lanka is the world’s second largest tea exporter with nearly 90
percent of the production being exported.Until recently Sri Lanka used
to be the largest exporter in the world. However, in recent times the
country has faced stiff competition in retaining its position as the
main source of orthodox black tea in the world.
Tea exporters fear that the Libyan crisis could have a crippling
impact on export volumes that might decline sharply with less demand
from the region. Experts are of the view that oil prices will surge into
unprecedented levels if there is no early solution to the crisis in the
Middle East.
“There are some ripples of the Libyan crisis on tea exports with
disruption to port activities and financial transactions in the
country”, Fernando said.
Tea consumption in the world has always been high and it has
withstood all storms as a popular health beverage. Tea is consumed today
in various flavours produced at varying elevations and climates across
the globe.
China, India, Kenya, Sri Lanka and Vietnam are the top tea producing
countries. China produced around 1,358.6 million kgs of tea in 2009. Tea
production in Sri Lanka in 2009 was 289.7 million kgs.
Fernando said tea production depends on global prices and the
weather. Tea production in Sri Lanka dropped by around nine percent in
2009 due to unfavourable and work stoppages by estate workers.
Labour strikes and unrealistic wage increases could stifle tea
production and hamper growth in the industry. Wage increases should be
in relation to production to achieve a win win situation in the
industry.
Fernando said unlike in the past there is dignity of labour today.
Improvement to housing, healthcare, education, transportation and
incentives for workers are better than before.
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