Orthodox leafy tea fetches premium price - Anil Cooke

Lanka carves niche in global market:

by Surekha GALAGODA

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Sri Lanka has carved a niche in the global market for specialty orthodox black tea as the country has continued and developed the traditional style of black tea manufacture for more than hundred years.

Today discerning consumers looking for high end teas such as Orthodox Ceylon’s are willing to pay a premium price for it, said President/CEO Asia Siyaka Commodities (Pvt) Ltd Anil Cooke.

He said that Orthodox leafy tea production is accelerating in the country with even high grown areas moving towards leafy tea manufacture. Unlike in the past when high grown varieties of tea accounted for the bulk of national production; today low country teas account for 55% of all teas produced in the country.

Ceylon Tea is now more than its traditional range of fine tasting teas. It extends to some of the finest specialty black tea grades and even fine green teas.

He said that other black tea producing nations have been studying the trends and many countries are trying to expand orthodox manufacture. Therefore, we have to raise the bar, so that imitation and substitution becomes difficult.At present the country produces 14 grades of orthodox tea in 36 different growing regions.

Sri Lanka’s strength as the leading orthodox black tea nation is supported by its globally recognised brand Ceylon Tea and the Lion logo.

He said that earlier consumer loyalty was for the country of origin, but larger international packers changed this to a brand based identity. With brand loyalty growing, packers dropped references to origin. Today a growing number of consumers want to know what they are paying for.

They are also looking for more choices of taste and style and there is a growing awareness and demand for teas from different regions and single estate teas. Sri Lanka’s 36 sub districts, three elevations, two quality seasons and range of orthodox grades, are ideally positioned to meet this market trend.

Sri Lanka’s tea producers are investing heavily on new technology while upgrading the factories and systems. Being aware of the growing trend of consumer preference for healthier products and ethically produced goods Sri Lanka has led the way with the introduction of HACCP and ISO standards.

The strong legal framework maintained by the Sri Lanka Tea Board and high standards set and monitored by our Tea Research Institute has added credibility to our tea. This then could be the next standard for quality.

The challenges faced by producers are many. Sri Lanka is one of the high cost producers in the world. Recent global trends such as the escalating oil prices, increasing cost of electricity and continuous wage demand have added to this burden. For tea producers it is a continuous challenge to increase their prices, as many of the cost components are beyond their control.

He said that despite these constraints the high and steady reinvestment in technology, agricultural practices and factory development are positive features that are laying a strong platform for the future.

CEO Richard Peiris Plantation Group Ravi Kumararatna said that earlier 20-30% of Sri Lankan tea was exported to the UK. Today it is less than 5% while 80% of our tea is purchased by the Middle East and Russia.

The type of teas consumed are leafy teas in brewed form and tea bag consumption is not as developed in these markets. Sri Lanka’s leafy teas were originally produced in the low grown areas but now these varieties are produced in the mid and high grown regions as well and they fetch a premium price.

Today the largest tea producing areas are Ratnapura, Galle, Matara and Deniyaya; all manufacturing orthodox black tea.

Middle East and Russia are largely brewed tea drinkers and the Middle East can afford to pay a higher price as they have petro dollars.

He said that even in the US, though the market was mainly a Ready To Drink tea market made from tea essence they now drink brewed iced tea. Today only the traditional markets in the west drink small leaf mid and high grown teas.

The global economy has changed and the Middle East is a big tea drinker. Seeing this opportunity other producer countries such as India and Vietnam are exploring the possibility of reverting to producing leafy teas.