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By Ravi Ladduwahetty

Sri Lanka's tea industry took a reversal last year, after seven uninterrupted years. Earlier, tea production improved year after year.

The year 2001 saw for the first time in eight years, a decline by 3.5 percent while tea prices improved by 6 percent and in dollar terms declined by 9.14 percent.

However, the figures posted for 2001 looked very impressive with the catalytic factors playing a dominant role which includes the rupee auction average appreciating by 6 percent, rupee auction averages of all elevations, the highest in 2001, all-time high export volumes, record export earnings and increase value added exports.

In the wake of the rearguard action which was set for 2001 which was set to surpass the all time high of 306 million kilograms in 2000, came the go-slow or the work to rule which was imposed by the plantation trade unions led by the CWC, the Lanka Jathika Estates Workers' Union.

This act of defiance was in the backdrop of the demand that the plantation workers be paid an aggregate of Rs. 151, up Rs. 30 from the present Rs. 121.

The demands are within comprehension but what the industry and more so, the 21 of the 23 Regional Plantation Companies nine barring Chilaw Plantations and Kurunegala Plantations which are predominantly coconut) should aim at, is to have the wages tied to productivity.

Chairman of the Planters' Association Mahendra Amarasuriya said that the increased wage bill, if it is at the rate of 142 to which it has agreed to, would cost the companies Rs. 1,600 million and if it is at Rs. 151, would cost them Rs. 2,400 million.

Sri Lanka also has the dubious task of competing with other tea exporting countries such as India, Kenya and the new entrant to the market- Vietnam.

As for exports, Sri Lanka will have to look for the Middle Eastern and the CIS markets for its long term and sustainable growth in tea exports.

Given that the Middle East countries have well settled in the tea drinking habit and the reality that their restraint in the consumption of the alcoholic beverages give Sri Lanka therefore, has to engage itself in a protracted marketing drive in order to maintain its export markets, despite the reliance on exports.

Chairman of the Sri Lanka Tea Board Ronnie Weerakoon said that the Tea Board will continue to vigorously campaign tea exports with the participation in 20 well-organised exhibitions and trade fairs worldwide.

A further positive marketing plus for Sri Lankan teas is their quality among the best in the world, its diversity, originating from six agro-climatic zones in the country and the fact that they are the cleanest in the world, which has been awarded FAO accreditation. A further facet of the industry which has been cause for concern is the import of Indian teas into Sri Lanka for domestic consumption under the Free Trade Agreement as a reciprocal measure for India permitting the import of 15 million kilos of Sri Lankan teas.

The Indian access was affected with only two ports of entry for our teas with only Calcutta and Cochin. However, there have been two more ports which have been allocated in Mumbai and Vishakapatnam in the East coast.

The Government has permitted the import of Indian teas provided they conform to ISO 3702 standard and they are free of chemicals and pesticides. Sri Lanka has told India that it cannot give them an assurance that it would be for domestic consumption. It has the discretion of allowing them for blending.

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Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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