TEA to boost tea trade

By Lalin Fernandopulle

The Tea Exporters Association (TEA) has been re-activated with the appointment of an administrative secretary to carry out the daily activities of the organisation. TEA hopes to further strengthen the organisation by recruiting a secretary general next year.

National Chamber of Exporters (NCE) Past President and Chairman Heladiv Tea, Rohan Fernando said that the Association will hold regular meetings with exporters to look into their problems and boost trade.

TEA members account for over 80 percent of the country's total tea exports in terms of volume and value. The Association comprises around 50 members.

Fernando said that TEA will ensure that Sri Lankan tea exports will be a power to reckon with when it comes to export related business. The tea industry will be a key contributor to the Government's target of achieving an export revenue of $ 20 b by 2020.

"The Association has presented its strategy to the government to make Sri Lanka a tea export hub. The strategy is currently being studied. TEA will do an in-depth study with resource persons to analyse the impact of a highly controlled and confined environment in the tea industry," he said.

This study will be based on the current global trends in consumerism, supply chain management by major manufacturers of branded products and competitive pricing experienced since the world economic recession in 2008. Fernando said that despite many challenges to the tea export market such as the Middle East crisis, tea export revenue will touch the $ 1.5 b mark by the end of this year. Creating a monopoly is a dangerous phenomena.

He said that though tea production was adversely affected by the drought it did not have a major impact on exports. Sri Lanka's tea exports range from 300 to 350 million kilograms a year.

The CIS (Commonwealth of Independent States) are Sri Lanka's primary tea export markets. Sri Lanka also exports a large volume of tea in bulk form to the Middle East.

Tea production hit a snag due to the long dry spell in the hill country. Tea production dropped 16.7 percent during the first eight months this year, Sri Lanka Tea Board data revealed. Tea production in the hill country dropped from 54.7 million kilos during the first eight months last year to 47.3 million kilos in the corresponding period this year.

Fernando said that the turmoil in the Middle East has dealt a severe blow to Sri Lanka's tea exports. The crisis in Iran which is Sri Lanka's second largest buyer of tea has hindered tea exports to the country. The US and Western economic sanctions have caused constraints on the movement of goods and transactions.

The government has called upon exporters to look for alternative markets but tea exporters said that Iran has been a large market for Sri Lankan tea and it is not easy to shift to other markets within a short period.

Iran buys a round 40 million kilograms of Sri Lankan tea. Many tea exporters support the concept of setting up a hub for tea exports which will help increase tea export volumes while retaining the Pure Ceylon Tea image. The concept of importing and blending tea with Ceylon tea to expand export volumes is being debated.

Exporters who support the concept said that a tea hub in Sri Lanka will help boost tea exports and will not undermine the Pure Ceylon Tea brand.

They said that while a tea export hub will enhance the volume of exports it will create job opportunities in the packaging, banking, logistics and finance sectors.

Sri Lanka is the fourth largest tea producer in the world and it is a major contributor to the country's foreign exchange earnings. The industry is also a source of income to a large number of people. In 1995, Sri Lanka was the largest tea exporter in the world with around 23 percent of the total global tea exports but since then has been displaced by Kenya.