Tea industry anticipates $ 1.5 b export turnover

By Lalin FERNANDOPULLE

Tea exports to the Middle East have picked up amidst the turmoil in the region, tea exporters said.

They said the crisis in the region has caused delays in shipments and payments during the past six months which has been a turbulent period for many countries.

“We are confident that the situation will improve and exports will resume”, an exporter said.

Chairman, Heladiv Tea, Rohan Fernando said the quantity of exports has not dropped but the auction prices had declined during the past few months.

“Auction prices have picked up again and exports are reaching destinations through alternative routes”, he said.

Sri Lankan tea exports to the Middle East have been on rocky ground due to the political unrest in the region which accounts for the bulk of Ceylon Tea exports.

Trade with crisis-hit countries has been a rough ride due to economic sanctions and the war disrupting sea based deliveries. Fernando said however there have been alternative routes and payment channels now in operation to dispatch teas and obtain payments.

Tea being an essential commodity and a health beverage will not lose its way to the menu. “Neutral and less volatile countries such as Oman, Qatar and the UAE will act as distribution points for tea in the Middle East until the situation returns to normalcy”, Fernando said.

Exporters said the tension in Iran, Iraq, Libya, Syria and Tunisia, the main buyers of Ceylon Tea had an adverse effect on the market due to the logistics and payments being hampered. A large volume of Ceylon Tea is exported to the Middle East in bulk and value added form annually. Exports of tea to Iraq last year were 13m kgs, Iran 27m kgs, Syria 26m kgs, Jordan 16m kgs and Libya 10m kgs.

Chairman, Lanka Commodity Brokers Limited, Sarath Sirisena said that tea exports have been affected due to slow delivery and payments.

Tea exporters are facing difficulties due to sanctions on Iran and Libya as banks are cautious in accepting Letters of Credit (LCs).

The mediation of the Central Bank has helped solve the problem to a certain extent.

Tea exporters are optimistic that with the situation in Libya returning to normal, supply to the country will resume by the end of the year. The tea industry anticipates an export turnover of $ 1.5 b this year.