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John Keells PLC releases Annual Tea Review for 2007

John Keells PLC, the tea brokering subsidiary of John Keells Holdings PLC, released its annual issue of the Tea Review for 2007 and handed over the first copy of the report to Chairman, Sri Lanka Tea Board Lallith Hettiarachchi.

The John Keells PLC Tea Review 2007 being handed over to the chairman Sri Lanka Tea Board Lallith Hettiarachchi by Chief Executive Officer, John Keells PLC Sudath Munasinghe. Head of Operations, John Keells PLC - Romesh Walpola and Manager - Tea, John Keells PLC Hishantha de Mel look on.

While discussing the impact of the global economy on the tea industry, it also shows a comprehensive account of the market, global and local tea production and exports.

According to the report, the unrest experienced on the plantations in the first quarter of the year and insufficient use of fertiliser caused Sri Lanka tea production to decline by 2 per cent in 2007 in comparison to the previous year.

With a stringent approach by newcomers Kenya and China, Sri Lanka is compelled to compete on price instead of quality as the supply exceeds demand with higher cost of production and middlemen margins.

As China established to the world that effective production is not a result of the use of agro chemicals, micro-organisms and other hazardous components, the report states that many factories in Sri Lanka are implementing pre-harvest and harvesting practices to ensure it is free of pesticide residues.

According to figures released in the report, global tea production for the year 2007 was 3,727 Mkgs, showing an increase of 175 Mkgs from 2006. Kenya was the main contributor with an increase of almost 60 Mkgs over the previous year with China, too, increasing its production by 70 Mkgs.

World Tea Exports marked 1,565 Mkgs, reducing 20 Mkgs from 2006 out of which Kenya was the main contributor with 346 Mkgs and Sri Lanka proudly coming in second with 312 Mkgs along with heavy competition from China, India, Vietnam and Argentina.

The review states that CIS and UAE maintained their positions as the two largest export markets, whilst Iran overpowered Syria and established themselves as the third largest export destination for Sri Lankan tea.

Despite all these negativities, the latest report of the intergovernmental tea group under the FAO predicts a 4 per cent increase in the prices of tea in the next twelve months, continuing the trend of increase in 2007 of 6.5 per cent and the 11.6 per cent registered in 2006.


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