Challenging Times seen for Ceylon Tea

The Tea Exporters Association heldits 20th AGM, led by the theme ‘Challenging Times for Ceylon Tea’, at the Grand Marquee – Taj Samudra Hotel, Colombo, on the 06th of September 2019. Gracing the event as Chief Guest was HE Akira Sugiyama, Ambassador – Embassy of Japan, along with Keynote Speaker Rohan Karr, Managing Director – Hayleys Leisure Holdings. The occasion also marked its third consecutive year of presenting awards to outstanding tea producers, who play significant roles in the industry.

As the world’s largest producer of orthodox tea, Sri Lanka ranks as the world’s 4th largest tea producer and 3rd largest tea exporter. However, the renowned ‘Ceylon Tea’ faces many challenges, resulting in the slowing down of the growth of Sri Lankan tea industry.

Locally, the biggest issue faced is the decline in tea production, which resulted from adverse weather conditions, ban on use of glyphosate, inadequate replanting, decline in younger work force and gradual decline of quality of tea. In regards to the global export front, the US sanctions imposed on some of the middle- eastern countries and Russia , competition from other tea producing countries with comparatively low prices  have also contributed to the decline in Sri Lankan tea exports.

Addressing the industry’s current issues, incoming Chairman Sanjaya Herath commented, “Some of our major challenges include international barriers which limit traditional Ceylon Tea markets, emerging competition, challenges faced in safe guarding the quality of Ceylon teas, aging tea plantations, drop in crop levels and currency volatility.” He further stated, “Sri Lanka has many unique fortes, such as our rich heritage, biodiversity and unique location where we can move our cargo to any part of the world within 4 weeks. Although we face tough obstacles, we should hold fast to these inherent strengths and opportunities, and take our industry forward by addressing the burning issues in relation to international competition, quality and availability of adequate crop.”

According to recent reports, the tea production in the period of January-July 2019 was recorded at 184 million kg, displaying a gain of 1.9 million kg in comparison to the volume of 182.1 million kg recorded during the same period in the previous year. Additionally, tea exports in 2019 recorded a growth of 7.3 million kg vis-à-vis 162.7 million kgs of January-July 2018 – resulting in a growth to 170 million kg during the same period in 2019. Furthermore, the revenue of Rs.141.4 billion realized for January-July 2019 displayed a increase of Rs. 7.6 billion vis-à-vis Rs. 133.8 billion of January-July 2018, resulting in a gain of Rs. 9.33 in FOB value for January-July 2019 – which increased to Rs. 831.77 per kg from Rs.822.44 during the previous annum.

Chief Guest, Akira Sugiyama – Ambassador, Embassy of Japan stated, “I commend the commitment and sincere efforts of Sri Lankan tea producers and tea exporting companies to maintain and upgrade the quality of Ceylon tea – abiding by the international food safety requirements. I am also deeply impressed by the Tea Exporters Association’s CSR programs, its longtime contribution to the development of the tea industry and its overall key interest in furthering the inclusive development of the Sri Lankan society.”

“Many Japanese people love Ceylon tea. Statistically, Sri Lanka’s tea export to Japan accounts for about 20% of the total export to Japan,” stated HE Akira Sugiyama. “By embracing the spirit of this new era, I wish to further strengthen the bond of friendship between Sri Lanka and Japan. I believe that the T.E.A. will continue to play an important role in bridging the two countries and promote our shared love for tea.”

The outgoing Chairman of T.E.A, Mr. Jayantha Karunaratne stated, “The Tea Exporters Association was formed about 20 years ago to provide a forum for tea exporters to discuss common issues and find solutions in order to take up issues locally and internationally. We are entering challenging times for the tea industry and it is very important to understand the challenges we face and work collectively to take the industry forward”. He further commented, “This industry has been one of Sri Lanka’s main export earners for almost 150 years, so we need to be innovative in all sectors, create demand for our products and change our current methodology of working to be on par with our competition.”

The Keynote Speaker for the evening – Mr. Rohann Karr, Managing Director of Hayleys Leisure Holdings stated, “The way we do business and the way we think about tea should be a paradigm shift. If we want to nobly put Ceylon Tea on the map again, we have to totally think out of the box”. He further commented, “We need great leaders, thinkers and strategists to come together, put their personal interests aside and create a road map that will provide the industry with recovery, followed by success in years to come. This will only be possible if everyone works selflessly towards a common goal – the Ceylon tea goal.”

Drawing attention to the difficulties faced by the industry, the theme ‘Challenging Times for Ceylon Tea’ accentuated the motive of promoting and protecting the common interests of members who are engaged in exporting tea. The Tea Exporters Association plays a pivotal role in making Ceylon Tea synonymous with the world’s finest tea by popularizing Ceylon Tea throughout the globe, and strategically positioning it amongst the global market leaders. The Tea Exporters Association strongly believes that a timely and effective intervention of relevant policy makers and concerted efforts of all stakeholders could no doubt provide a timely solution to boost the industry and sustain its growth in years to come.

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