Commercial hub policies provide framework:
Sri Lanka, a one-stop shop for tea
The commercial hub policies adopted by the Government recently will
help Sri Lanka to become a one-stop shop for tea with the tag 'Tea
Nation of the World', said Tea Exporters Association (TEA), Chairman
The Finance Act - Commercial Hub Regulation No. 1 of 20 gazetted by
the Government in July 2013 gives the policy framework for commercial
This allows Sri Lankan industries to import products, make value
additions here and re-export it.
Industrialists of the two main export commodities of the country,
apparel and tea are positive regarding the new policies.
Fernando said that tea exporters had been calling for these policies
for long years.
The Sri Lanka tea industry will be enhanced through these policies.
However, some sectors expressed fear and argued that that the move would
damage the international brand image of Ceylon Tea. While we are in a
dilemma, new trends have emerged in the global tea trade and now several
countries have emerged as tea trading hubs.
Fernando said that although the policies have been gazetted, the
parametres of the policies, implementation plan and the time frame has
not been given. “We are positive of the move and that we presented this
blueprint to the Government some time ago.
This will allow us to import, add value and re-export tea and it will
create additional demand and many benefits,” he said.
He said blending and re-export is already taking place and with the
new policy in place it would develop as an industry. He said it would
not affect the Ceylon Tea brand image and the products are exported as
Pure Ceylon Tea and Blended Ceylon Tea brands separately. Fernando, also
exports tea under the brand Heladiv Tea.
Former TEA Chairman and Chairman of Ceylon Tea Marketing Ltd,
Jayantha Keragala said that the policies were good but it was too late
now. We urged the Government to introduce these policies in 2008
recognising the developments in the global tea trade.
Several countries such as Dubai, Russia, Oman and Vietnam attempted
to consolidate the global tea trade and as some of them are well
established now it is difficult to change. We needed facilities and tax
concessions for importing, blending and re-export. If we had introduced
the policies earlier our infrastructure and trade channels would have
been very strong today, Keragala said.
He said that Sri Lanka can produce a maximum of 350 million kg of tea
per year and the plantation industry has faced many issues such as the
high cost of production, labour shortage, limitation of land and issues
in replanting and as a result Sri Lanka cannot expand production
further. Yet, we have a niche market and we can move forward, he said.
Tea Research Institute (TRI) Director Dr. Sarath B. Abeysinghe said
from a commercial point of view this decision is important but as a tea
producer there are reservations among industry stakeholders. Tea
exporters are optimistic but tea producers fear that the brand image of
Ceylon Tea will be tarnished.
This can happen if the blended teas are exported under the Pure
Ceylon Tea brand.
Therefore, what is needed is a proper transparent mechanism that
ensures that the Ceylon Tea brand is intact. Appropriate policies to
make Sri Lanka the global tea hub was a long-felt need and there were
discussions regarding the matter in the past.
But we failed and today Dubai has taken over the position and most
multi-national buyers now operate from Dubai, he said.