Reposition Ceylon Tea in 25 key markets

By Ravi Ladduwahetty - Ceylon Finance Today

Chairman of the Tea Exporters' Association Rohan Fernando has told both Plantations Minister, Lakshman Kiriella and Finance Minister, Ravi Karunanayake to reposition Ceylon Tea in 25 key markets, which the Sri Lanka Tea Board and key industry stakeholders have identified.

On the subject of re-positioning of Ceylon Tea, the Sri Lanka Tea Board and tea stakeholders have identified 25 key markets for a Ceylon Tea Promotional Campaign utilizing the funds of Tea Promotion Fund of SLTB. The campaign should be implemented without further delay to sustain our market share, Fernando has implored the two ministers.

Under the proposed strategies for the tea sector, Fernando said: "The Global tea consumption is growing in terms of both volume and value at 2% per annum. The Ready To Drink (RTD) tea segment has an annual growth rate of 6% while specialty tea segment is growing at a rate of 12% per year. As per the Euro-monitor data the value of global tea market is US $ 90 Billion and Sri Lanka's share is only 1.66%. The Asia Pacific Region with China is the fastest value growing region in the World Tea market. The Tea Exporters Association seeks the assistance of government to enhance Sri Lanka's value share in the Global tea market and recommend the following for consideration.

• Development of Sri Lanka tea brands globally with matching funds from SLTB Tea Promotion Fund and Tea Export Companies has been already agreed and this scheme also need urgent implementation.

• Expedite the proposed FTA with China and Turkey as both are important markets for Ceylon Tea.

• Implementation of Tea for Oil or Riyal-Rupee arrangement with Iran to facilitate tea exports to this important market in the Persian Gulf. This would certainly improve the low grown tea prices in Sri Lanka.

India has established a Riyal-Rupee payment mechanism for their tea exports and purchase of oil with Iran. A Turkish bank acts as the intermediate bank of the operation. Sri Lanka may consider a similar arrangement.

• Initiate a dialogue with government officials in Russia and some CIS countries to explore possible avenues to overcome the current issues affecting Sri Lanka tea exports to the region. The tea for oil or Rouble-Rupee trade arrangement is some of the available options.

• Support new product development for better value addition in the tea sector. The RTD, instant teas and other tea based products need encouragement.

State assistance by way of grants or interest waivers for capital expenditure for development of new technology backed by research and development would empower the tea export industry towards reaching the US $ 5 Billion in export revenue by 2020.

• Sri Lanka Tea Nation – re- look at the Tea HUB concept to take a bigger share of the global market as the production in Sri Lanka is virtually stagnant around 350 million Kgs. Greater export business in value added teas will also enhance several other sectors such as packaging, shipping, banking as well as creation of skilled jobs, Fernando has told the two Ministers.

The representations to Plantations Minister Lakshman Kiriella has been sent through the Chairman of the Sri Lanka Tea Board Y.G. Wijeratne while the communiqué to Finance Minister Ravi Karunanayake has been dispatched directly.