Tea trade calls for 'less restrictive' import policy

by Chandani Jayatilleke

The head of the Colombo Tea Traders' Association (CTTA) has suggested the government go for a limited opening up of tea imports to test the tea hub concept, the exporters have suggested as a way on increasing value added exports.

CTTA, Chairman, Anselm Perera said there was still no resolution of the tea hub concept which exporters have long called for. "Positive agreement has eluded us as many looked at it through a little pinhole and some have personal agendas," he said in his address to the 122nd Annual General Meeting of the CTTA on Friday. "Others failed to consider the hub concept in a wider perspective."

Small holders and some regional plantations companies fear auction prices would be badly hit if tea imports are liberalised to enable exporters to do more blending and re-export, Perera said.

"Now tea imports are allowed within restrictive parameters. We could continue with a less restrictive system and make it a testing ground to a higher level of flexibility before we implement the hub concept," Perera said. "Of course, this should be strictly regulated and confined to a location with the Tea Board overlooking it with very high discipline."

Perera acknowledged that "sometimes our exporters also do things that are not ethical." The success of the project will improve export of value added tea products in a more flexible environment, he said.

Minister of Plantation Industries Navin Dissanayake, who was the chief guest at the AGM, said the government was supportive of the hub concept but was hesitant to implement it because of fears by producers big and small that more tea imports would reduce Colombo auction prices.

"If the industry can thrash these issues out it will be easy for me as a policy implementer," he said. "There is no consensus on the tea hub for blending proposal. Producers are hesitant because of the impact blending will have on prices. Will prices come down? Then how will producers and small holders face it? Can this audience give an assurance prices won't come down? If so, I have no issue." He added: "If I take the risk as minister, I must know there will be genuine returns the industry will bring."