Tea exports pass US$ 1b landmark

Ramani KANGARAARACHCHI

The tea export trade has recorded a landmark achievement, by exceeding the US $ 1 billion value barrier in 2007 for the first time in its 140 year history.

Chairman Sri Lanka Tea Board Lalith Hettiarachchi said, the value of tea exports in 2007 recorded a 22 per cent increase over the 2006 figure by advancing from Rs. 91.7 billion to Rs. 112 billion which is a remarkable improvement.

The Chairman Colombo Tea Traders’ Association T. Akbarally said the annual crop for 2007 declined by only 2 per cent and this outstanding performance was achieved, notwithstanding the most challenging circumstances the tea industry faced during the year such as crippling work stoppages by the plantation labour unions, over wage issues at the beginning of the year coinciding with severe drought conditions that further impaired production.

The annual production in 2007 decreased from 310.8 million kgs in 2006 to 304.6 million kgs.

He said despite the significant increase in the value of tea exports, the volume of tea exports in harmony with the crop loss, has recorded an even greater reduction of almost 5.5 per cent from 327.4 million kgs to 309.8 million kgs.

However, it is noteworthy to mention that the value of each kg of tea exported increased on average, by 29%, he said.

Chairman Hettiarachchi said the future challenge of the industry is to increase the export of value added tea from 35% to 65% because the bulk tea gets a low price and value added tea gets a higher price.

He pointed out that the budget proposal submitted last year to set up an export fund to help tea exporters did not get attention but there is a strong case for the Treasury to consider the incentives as they get only a marginal Rs. 30 to 40 million from their own cess which is not sufficient.

The total extent of tea in Sri Lanka stands at 221,000 ha in 14 administrative districts and it has created more than 1.2 million direct and indirect employment.

It is the only 100 per cent import inputs free micro commercial agri business in the country which earns 13 per cent of export income and 60 per cent of total agricultural exports.