“Russian/Ukraine, ME crisis no hindrance to tea exports”

The current Russian/Ukraine and the ongoing Middle Eastcrisis have not affected the Sri Lankan tea exports to these countries as there was no cancellation of orders, said Chairman Colombo Tea Traders Association Sanjaya Herath, at the launch of the Colombo International Tea Convention to be held fromJuly 24 to26 in Colombo.

He said that during the peak of the Red Sea crisis there were some concerns as the freight rates were high. “However there is a positive turn around in this regard.”

Currently Iraq is Sri Lanka’s number one exporter for Ceylon Tea with a total of 8.41 M/Kgs, with an increase of 45% YoY in January-March 2024 against the previous year’s 5.79 M/Kgs. U.A.E (7 M/ Kgs) followed by Russia (6.42 M/Kgs) continues to maintain their positions at second and third place respectively. He however said that the depreciation of the US dollar against the Sri Lanka rupee is a major concern to the industry. He said that tea exports were down last year to around 300 M/KGs but saw an improvement against 2022 which was 256 M/Kg. He said that Sri Lanka tea due to its value added quality always remains around USD 1.5 high against other tea products in other countries.“Hence we expect revenue of around USD 1.5 billion from tea exports this year and hope to increase to USD 2 billion thereafter.”

Regional Plantation Companies’ representative Senaka Alawattegama said that the main reason in addition to weather issues was the banning of glycoside and implementing the 100% organic fertilizer scheme. “We are now only recovering from this.”

He also said that the tea industry pays the highest wages for staff in Sri Lanka and it’s unfair to ask to pay more as overheads have increased and dollars depreciated. He also disclosed that though a Minister announced late last year that the RPC were given an extension of the current lease on State lands they are yet to receive any official documentation in this regard. “Until we receive an official communication from the government we are reluctant to do major re-investments.”

Tea Board Chairman, Niraj De Mel said that due to high fertilizer prices the usage of fertilizer is low by tea smallholders. “To cover this we are providing a financial assistance of around Rs. 200 million for tea smallholders. “The total allocation for this project is Rs. 1.2 billion.

Source: Daily News