21 December 2016 12:03 am
One of Sri Lanka’s eight tea brokers, Ceylon Tea Brokers PLC, recently called on the industry to consider preparation to break into Asia’s high-growth beverage market, as traditional commodity exports are starting to lose steam.
“The Asian beverage market is expected to experience unprecedented growth, taking two thirds of the global incremental consumption by 2021, with China alone (accounting for) one third of the additional volume, whilst Middle East and North Africa is anticipated to have a significant increase,” a report said.
It added that while Sri Lanka is the top exporter of tea, new studies have to be done to explore taste preferences, consumer habits and the global beverage market to enhance performances in existing markets, and to break through to new ones.
“The 4.4 billion populated Asia region is a market awaiting to be explored.
Converting non consumers into consumers, reverse innovation and value addition are methods that could be adopted to harness the full potential of this market,” the report said.
It added that tea exports to emerging tea markets for Sri Lanka, such as China, USA, Netherlands, Germany and Belgium have increased during the course of 2016 as well.
Ceylon Tea Brokers went on to say that it is important to pay attention to even weak signals from changes of technology and competition that are starting to crop up in the industry, and that market players should act on such information and allocate resources accordingly to create viable growth for the industry.
It went on to say that instead of trying to bridge the domestic production efficiency gap, exporters should look at narrowing the global opportunity gap.
Sri Lanka’s US$ 1.34 billion tea export figure in 2015 is dominated by bulk volumes. The global tea beverage market is US$ 38.2 billion, out of the US$ 1,937.73 billion global non-alcoholic beverage market. Coca-cola, the single largest brand, has annual sales around US$ 43 billion.
Meanwhile, Ceylon Tea Brokers said that although the price of an oil barrel is expected to increase marginally to US$ 55.95 in 2017, the rupee is expected to depreciate against the dollar, which would increase export competitiveness.
Oil producing countries in the Middle East and North Africa, and Russia, are Ceylon Tea’s main customers.
Ceylon Tea Brokers said that the uptick in the Iraqi, Russian and Iranian economies due to various reasons could be positive for Sri Lanka.