Tea blending to be given priority

At the post annual report discussion held at the Central Bank, Swarna Guneratne Director of Economic Research in her presentation stated that government intends setting up tea blending operations in Sri Lanka to boost exports and the likely site could be from Trincomalee. This seemed good news for the Sri Lanka Tea trade for providing way for import of teas from other origins to be reblended in Sri Lanka for re-export with imitations of tea crop. Though this is already taking place in limited scale at present scope for these operations are vast. In 1982 then minister of trade took the initiative to amend the legislations and proceeded to pursue import of tea for reblending and export.

Ever since James Taylor planted the tea plant in Looecondera Estate tea has continued to be a significant source of foreign exchange earnings. At present tea export fetches nearly USD 2 Million ranking immediately below Garments. Despite government take over's, insurrection led destructive efforts tea has remained as the leading Agricultural export. Now that the government has set themselves a USD 20b target for export earnings by year 2012, it is ambitious realistic and needs to be pursued.

Country's tea exports and production remain around 300 mt kilograms for number of years, limitation of land, labour shortages, trade union action etc has been the key factors contributing to this scenario. Way back in 1982 then minister of Trade seeing this situation pursued his efforts to promote Sri Lanka as tea blending centre and necessary legislation was introduced.

The scheme worked moderately with the active participation of the newly established Export Development Board and the Sri Lanka tea board. This scheme was not much welcomed by certain sections of producers who were apprehensive to the fact that such imported teas would eat in to their share in exports.

In 1994 authorities clamped down the import of orthodox teas from other origins, this however did dampened the country's tea blending activity.

Today tea blending using teas of different origins is taking place at a brisk pace in leading centers like Rotterdam, CIS, and Dubai etc. Multi origin blending is now a key activity among the leading packers in the World. It is no secret that many Sri Lankan entrepreneurs have set up off shore reblending in certain strategic locations. What is critically important is for the Tea Board to strictly monitor tea imports to prevent unauthorized leakages.

Given the current macro economic imbalances and the need to build up reserves to develop stability the country must necessarily enhance exports as well as foreign direct investments to face the future with confidence; hence development of export is undoubtedly a priority.