Tea industry needs to look beyond current dynamics | Page 3 | Sunday Observer

Tea industry needs to look beyond current dynamics

Planter’s Association Secretary General Lalith Obeysekere
Planter’s Association Secretary General Lalith Obeysekere

Sri Lanka tea currently enjoys premium prices in the international market. In the long term, the industry needs to look beyond current dynamics and explore methods of achieving a higher level of global competitiveness.

Value addition is a key focus area in this regard and more needs to be done to forge local and international partnerships that will drive greater value addition, Planter’s Association (PA) Secretary General Lalith Obeysekere said.

“Funds raised for tea promotion should be used to effectively assist exporters in a manner that brings tangible returns to the national economy. Such efforts must be complemented by aggressive research by the Tea Promotion Division of the Sri Lanka Tea Board to link exporters with new potential markets especially in populous countries,” he told the Business Observer.

However, he said that beverage consumption habits are shifting with a preference for greater diversity in the preparation of tea among the youth, such as iced, flavoured and bubble tea. These changes are attracting larger numbers of new consumers to tea, and so the future from the demand side seems quite promising.

Excerpts of the interview:

Q. What is the present status of the country’s tea industry?

A. Over the past year, the tea industry has benefitted from increased demand for Pure Ceylon Tea in key export destinations which has bolstered prices and enabled improved performances across the sector. Unfortunately, while demand conditions were positive, we continue to face supply side issues, particularly in terms of restrictions being placed on orthodox teas and the continuing uncertainty that the Regional Plantation Companies (RPCs) are being made to endure as a result of proposed interventions into their management by policy makers.

Q. What are the production targets for this year?

A. Generally, the first quarter of the year is a relatively lean cropping period as a result of dry weather. However, during the first quarter of this year, we experienced unusually wet weather, resulting greater volumes of production than first anticipated.

In that regard, we expect that most producers will exceed their 2017 targets while the prospects for 2018 are also quite good.

Q. What is the impact of the weather on the tea growing areas?

A. While the overall impact of improved weather conditions helped boost tea production, one of the major draw-backs was in relation to the control of weeds.

Increased rain resulted in prolific growth of weeds, and these challenges had been severely exacerbated by the absence of a suitable chemical weedicide consequent to bans imposed by the Government.

Q. Does the changing weather pattern affect the quality of our tea?

A. Over the past year, there have not been any sharp changes in weather patterns to the intensity of negatively impacting the quality of tea produced.

Tea production in the Western sectors of the high grown regions – where a majority of RPC tea production facilities are centered – experienced usual seasonal variations in production, and continued to produce teas of high quality that fetched strong prices among international buyers.

Q. The glyposate ban had a negative impact on the tea industry. With the removal of the ban do you expect to gain positively over the next year?

A. The relaxation of the glyphosate ban has drastically improved the outlook for the industry. Manual weeding is an extremely labour intensive exercise and one that all in the industry would have found extremely daunting and detrimental to soil quality as a result of increased erosion from the application of manual weeding techniques. The ban resulted in standard processes such as the application of fertiliser having to be postponed pending the weeding of fields.

These disruptions meant that we could have produced greater volumes of Ceylon Tea at a time when international buyers were willing to pay a premium for it and that is an irreparable loss to our nation and economy. With the relaxing of the ban, we have been told that glyphosate will be made available to the industry soon, following which, estates will commence cleaning their fields and resuming agricultural practices necessary to optimise production.

Q. The tea industry is constantly facing a labour shortage. What is the solution?

A. At present, a substantial proportion of the plantation community are residents but no longer work in the estates, and many are shifting into entry-level positions in the service and retail sectors.

This shift of labour from the agriculture sector to the services sector is a natural one that will continue to grow as more jobs open up in the services sector outside of the Western Province and is a direct result of continued economic development.

Managing this transition is not the sole duty of the RPCs. While we continue to provide facilities, infrastructure and healthcare to these communities – including those who are not employed on the estates, there must also be policy decisions taken by the State to facilitate the integration of non-worker estate residents into society through the establishment of new townships, as has been highlighted by former Sri Lanka Tea Board Chairman, Rohan Pethiyagoda.

Meanwhile, the RPCs are exploring alternative strategies including the deployment of mechanised shear harvesting and other innovations to improve the productivity of existing labour. These methods could potentially be complemented with an out-grower model whereby estate lands are managed by worker families and the harvested green leaf is then supplied to factories. This creates a sense of ownership and incentivizes outgrowers to carefully tend to the crops while addressing issues related to the dignity of workers. There have been some promising experiments carried out in relation to both.

Q. Has value addition been a good option in tea exports? What are your suggestions to improve exports?

A. While Sri Lanka Tea currently enjoys premium prices in the long term the industry needs to look beyond current dynamics and explore methods of achieving a higher level of global competitiveness. Value addition is a key focus area in this regard and more needs to be done to forge local and international partnerships that will drive greater value addition. Funds raised for tea promotion should be used to effectively assist exporters in a manner that brings tangible returns to the national economy.

Such efforts must be complemented by aggressive research by the Tea Promotion Division of the Sri Lanka Tea Board to link exporters with new potential markets especially in populous countries.

Q. How are we progressing with the tea hub concept? What is your opinion of this concept?

A. From a growers’ point of view this concept doesn’t augur well for the local industry. While every kilo of tea in this country is regulated and sold through the auction the Tea hub will open the doors for cheap teas to be brought in and blended with Ceylon Teas and re-exported. Even with stringent safeguards in place, this will undoubtedly result in a reduced demand for Ceylon Tea while also having potential negative impact on the world famous ‘Pure Ceylon Tea’ quality viz-a-viz tea packed as Ceylon Tea that is blended with other origin teas.

Q. Has the tea drinking patterns the world over changed? How are we to adopt to this situation?

A. Internationally, consumers are becoming much more health conscious, particularly among younger demographics and tea is a beverage that has undoubtedly established itself as a healthy drink across the globe as more consumers become aware of its potential health benefits.

For many years’ Green tea has been thus identified but promotional work undertaken by tea producing countries on the numerous health benefits of consuming quality black tea needs to be similarly amplified. Habits of beverage consumption too are shifting towards a preference for greater diversity in the preparation of tea among the youth such as iced, flavoured and bubble tea. These changes are attracting larger numbers of new consumers to tea, and so the future from a demand side seems quite promising.

Q. What are your plans for the development of the tea industry? How would you encourage more youth in to the industry?

A. Ceylon Tea is world renowned for its superior quality, however, we cannot afford to rest on our laurels. Instead we must seek out new ways of proactively addressing the challenges ahead.

The PA actively encourages members to work closely with trading companies to identify and adapt to changes in consumer trends. From a growers’ point of view our companies are also working towards improving productivity which is one of the most pressing concerns currently facing the industry.

We will also support discussions to arrive at a consensus in the design and formulation of a new wage model that will meet the needs of workers while allowing for sustainable business performances among the industry, in consultation with Trade Unions representing plantation workers.

If we ensure that workers in the plantation sector earn higher wages in a manner that is correlated with productivity, we are confident that we can attract more youth into the industry while ensuring its viability for generations to come. 

Comments

Good points. Unfortunately if you give a solution they will never follow through. So is there a point of wasting time?

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