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Better scope for Sri Lanka tea to recapture its former share in the lucrative Egyptian market was indicated at the second Sri Lanka - Egypt joint commission meeting held in Cairo last week as the ground was cleared for a bilateral Free Trade Agreement (FTA) next year.

At the discussions, Commerce and Consumer Affairs Minister Ravi Karunanayake and his Egyptian Counterpart, Trade Minister Dr. Youssef Boutros Ghali had agreed to conclude the FTA within the next three months and Dr. Ghali to visit Sri Lanka in the first quarter of next year to sign it.

Egypt was a traditional Ceylon tea buyer for a major volume until the emerging player Kenya got the competitive advantage at the zero duty rate under the Common Market for Eastern and Southern Africa (COMESA) agreement signed in 1994.

The situation was reflected in the 74% volume drop of tea export figures to Egypt between 1997 to 2001, where 14,325 MT, worth Rs. 1622.8 million was exported in 1997 which was reduced to 3756.5 MT, valued at Rs. 585.1 million last year.

Karunanayake said that the Egyptian government has principally agreed to provide the level playing field for the Sri Lankan Tea under similar duty concessions enjoyed by COMESA member countries such as Kenya. He said that a Task Force from the Egyptian Foreign trade Ministry is expected in Colombo in early January to negotiate the FTA terms with their counterparts, Commerce Department officials. The balance of trade between the two countries is in favour of Sri Lanka, which was Rs. 878.6 million last year where imports from Egypt mainly consist of fertilizer and lentils.

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