Lanka's tea export earnings top $ 1 b

Sri Lanka's tea export earnings passed the US$ one billion mark for the first time in the 141-history of the tea industry in 2007.

Chairman, Sri Lanka Tea Board Lalith Hettiarachchi told a press conference at the Galle Face Hotel that India, China and Kenya are large producers. Sri Lanka is the number one orthodox tea exporter though our production cost is the highest in the world.

The value of tea exports in 2007 recorded a 22 per cent increase over 2006 by advancing from Rs. 91.7 billion to Rs. 112 billion which is a remarkable improvement.

Hettiarachchi said that the future challenge of the industry is to increase the export of value added tea from 35% to 65% because the bulk tea gets a low price and value added tea gets a higher price.

He said that the budget proposal submitted last year to set up an export fund to help the tea exporters did not receive attention but there is a strong case now for the treasury to consider the incentives as tea exporters get only a marginal Rs. 30-40 million from their own cess which is not sufficient.

Chairman, Colombo Tea Traders' Association T Akbarally said the annual crop for 2007 declined by only 2 per cent and this outstanding performance was achieved, notwith- standing the most challenging circumstances the tea industry faced during the year such as crippling work stoppage by the plantation labour unions, over wage issues at the beginning of the year coinciding with severe drought conditions that further impaired production. The annual production in 2007 decreased from 310.8 million kgs in 2006 to 304.6 million kgs.

He said that despite the significant increase in the value of tea exports, the volume of tea exports compared to the crop loss, has recorded an even greater reduction of almost 5.5 per cent from 327.4 million kgs to 309.8 million kgs. However, the value of each kg of tea exported increased on average by 29%.

Minister of Plantation Industries D. M. Jayaratne said that he is happy about the achievement and called upon the industry to adopt a three-pronged strategy to further increase the income from the industry.

The strategy includes increasing the production of good quality tea leaves, increasing the productivity of the workers and exploring the sales strategies to increase exports.

He said that though the smallholders are getting good yields the tea estates managed by the companies are not getting the required yields and at present they are losing 501 kgs per hectare.

Minister Jayaratne said that at present only 3% of the tea is produced in the country using bio fertiliser and we should gradually stop the use of synthetic fertiliser and move to organic fertiliser and capitalise on the health factor as this will help tea exporters to fetch a premium price for their produce.

The total extent of tea under cultivation in the country is 221,000 ha in 14 administrative districts and it has created more than 1.2 million direct and indirect employment opportunities.

It is the only 100 per cent import inputs free micro commercial agri business in the country which earns 13 per cent of export income and 60 per cent of total agricultural exports.

SG