Invest more on tea branding and value addition -NCE chairman

By Gamini WARUSHAMANA

The tea market stabilised with tea prices increasing in December and this would improve further in January, said the President of the National Chamber of Exporters (NCE) and Chairman, HVA Lanka Exports (Pvt) Ltd. Rohan Fernando.

At the last tea auction on December 16 and 17, 2008, the average prices for high grown, medium grown and low grown tea were Rs. 208.88, 188.64 and 224.76.

However, market sources said that the market trend cannot be predicted, based on these prices because the next auction will be held on January 6 and there is a long period in between. Therefore, there was a high demand at the last auction.

To face the challenges in the international markets due to the global economic crisis, the government should support the tea exporters to build Sri Lankan tea brands and export more value added products, he said.

Unfortunately, the authorities attempt to invest in the other end of the industry by supporting the growers and factory owners, he said.

Fernando said that the government should not take decisions by looking at street protests or the voters in this time of crisis.

If Sri Lankan tea can capture and maintain the vast international market the whole industry including the factory owners, growers, smallholders and the workers will be safe and the industry would be sustained. Therefore, pumping money to the wrong end would not help the industry. Fernando said that the government should invest the cess fund which is over Rs. 1 billion an year for marketing, making brand images and value addition of Ceylon tea. The industry has a legitimate right to demand these funds, he said.

He said that the industry including factory owners and growers should be able to hold on during this difficult situation.

The prices were low only two months and if the industry cannot hold on during such a short period, the tea industry in the country is not sustainable. All the stakeholders in the industry capitalised from the long boom in the industry and high price, Fernando said. According to Fernando, the value of Sri Lankan tea exports was US$ 1.1 billion in 2007 and the industry targeted Rs. 1.3 billion in tea exports last year.

If Sri Lanka exported value added tea this value would be nearly US$ 5 billion and therefore value addition is vital for the industry.

Fernando denied reports which said that Vietnam is capturing our main markets. However, Vietnam is looming as a strong competitor and it is the second largest orthodox tea exporter in the world.

Sri Lanka has not yet seriously felt the impact of the global economic crisis. However, the next two three months would be more difficult as a result of the contraction in global commerce, he said.