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Last Updated : 2024-03-29 16:14:00
Two articles in Daily Mirror on tea (Nov 9 by M.J. Fernando Nov. 10 by Tea Exporters Association (TEA) highlight the controversy on importation of tea. As Mr Fernando has said importing tea, and blending it with local Ceylon Tea will bring down the quality of Ceylon Tea and may cause prices to decrease. TEA appears to be of the opinion that the growth of the tea sector is restricted by non-availability of adequate quantities of tea and hence, TEA has proposed to liberalize tea imports to address the declining trend in the country’s tea export share.
According to the Central Bank reports around 200,000 ha are under tea. As indicated in the table the total production of tea has continued to decrease from 340 million kg in 2013 to 292 million kg in 2016 although TEA says that the tea production has stagnated around 330 million kg. The amount of tea exports too has decreased during the last few years. In 2014 we exported 327 million kg but this value has decreased to 289 million kg in 2016 . As indicated in the table, foreign exchange earnings from tea have continued to decrease in spite of some tea being imported for re-exports. As indicated in the article by TEA, Sri Lanka’s share in the world tea market has come down from 10.5 % in 2000 to 6% in 2016 and this is likely to go down further and the country will not achieve the expected foreign exchange targets. All these data indicate that there is something wrong in our tea sector.
According to TEA in the article of Nov. 10 there is no accepted plan to increase tea production and hence propose to increase liberalization of tea imports to address the declining tea exports. In such a situation it is better to formulate an effective plan to increase tea production in the country rather than importing lower quality tea and blending it with Ceylon Tea. Importing tea to be blended with Ceylon Tea will be detrimental to the tea sector as what happened to some other sectors such as Pepper in the recent past. TEA suggests that there should be a tea hub in Sri Lanka. When our tea production is going down and also when there is a strong tea hub in a central place such as Dubai, a proposal to have a tea hub is unrealistic. In the rubber sector too a unrealistic master plan involving US $ 500 million has been developed and is going to be implemented.
Almost 90% of the tea produced in the country is exported. Hence, the opinion of TEA that the growth of the tea sector is restricted by non-availability of adequate quantities of tea is not correct. There may be a number of factors which caused our share in the world tea market to come down during the last few years. One of these is possibly high costs. It is necessary that a detail study is made to determine what factors cause our share in the world tea market to come down.
An analysis of tea production levels in tea producing countries indicate that Sri Lanka has lagged behind. According to FAO statistics our average tea YPH in 2014 which stood at 1522 kg/ha is well below the average tea YPH of 25 countries such as Iran, Japan, Kenya, Vietnam . The success of the Kenyan tea industry has been ascribed to appropriate research and development (R&D) by the Kenya Tea Research Institute. The decline in the tea sector in Sri Lanka can be attributed to a number of factors. Among these are land degradation, shortage of water, old age crop etc.
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