Tea industry stakeholders must create a new development framework and promote Ceylon Tea at a premium, setting aside the idea of making the country a tea hub, if the current export target of US$ 5 billion in tea export earnings is to be achieved, according to Secretary to the Treasury, Dr P.B Jayasundara.
Secretary to the Treasury, Dr P.B Jayasundara (2nd from the left) flanked by tea blending hub advocates, Vice Chairman, CTTA, Niraj De Mel (far left) and Chairman CTTA, Jayantha Keragala, with Vice Chairman, CTTA, Lalith Obeyesekere (far right). Pic by: Indraratne Balasuriya
“On average, we sell our tea at approximately US$ 4.50 per kilo but this is not right. We have to work towards increasing our prices into the range of US$ 15 per kilo and not on average but in absolute terms,” he added.
He further stated that such a price increase would only be possible through a greater focus on value addition, with local participation along the value chain, instead of the more recently discussed concept of a blending hub.
“A threefold price increase will mean that the industry will have to get more skilled labor, draft collective agreements or have no agreements at all or maybe the industry needs to develop on a different model all together. However, it cannot be done by importing tea.”
Dr. Jayasundara made these comments addressing the 118th Annual General Meeting of the Colombo Tea Traders Association, an organization which had recently advocated the ‘tea blending hub’ concept.
Dr.Jayasundara stated that a focus on selling Ceylon tea at premium prices would be particularly important in the context of a shift in economic momentum towards emerging economies.
“Things are different to how they were 30 years ago. Many countries which were poor are now getting rich and as you know the rich and the poor can’t remain friendly for long so it is difficult for us to maintain these friendships now.”
“At a time like this, Sri Lanka needs to lead from somewhere, and the tea industry could be that industry. The country needs to brand itself in a time when the world is getting richer. Tea is a rich man’s drink so there is a tremendous opportunity to market tea to these emerging economies when conventionally rich countries are struggling to sustain their richness. So, we need to look at the rich while competing with the poor.” Dr Jayasundara explained.
In that context, he said that the industry would have to look at promoting products tailored specifically to Chinese and Russian markets in particular.
“It won’t be easy, trade unions might not accept productivity increases and there might be other problems. You might not get the required credit to carry out replanting but this country has successfully traveled this journey so far. So I’m quite optimistic that we can cross the US$ 5 billion export target like we crossed the 30-year war.”