‘Tea has US$ 5 b export revenue potential’ | Sunday Observer

‘Tea has US$ 5 b export revenue potential’


Sri Lanka’s tea export revenue has the potential of doubling itself to US $ 5 billion, Chairman of the Tea Exporters Association (TEA) Sanjaya Herath told Sunday Observer Business last week.

He said that the manner in which export revenue could be increased would be to increase value addition, production and also quality.

He explained that the target of the Government was to have an export revenue of US $ 20 billion. He said that revenue from tourism was targeted at US $ 10 billion and if tea exports reached US$ 5 billion, the aggregate of the other exports needed only another US $ billion more which should not be too difficult.

“This follows the revenue of Rs. 240.6 billion realised from tea exports from January to December 2019 which was the highest ever surpassing the previous best of Rs. 233.3 billion realised in 2017,” he said.

He said this showed a growth of Rs. 8.9 billion when compared to Rs. 231.7 billion of the corresponding period of 2018. However, the export volumes were still lower than the highest volume of 320 million kg achieved in 2014.

The success of the export and production sectors are vital for the sustainability of the tea industry. Some are of the view that Sri Lanka should concentrate on the improvement of quality and produce about 250 million kg of quality tea which could fetch better prices while another school of thought says the country should maintain about 350 million kg of annual tea production so that factories can operate at full capacity.

However, it should be noted that world tea export volume has remained at the level of 1.8 billion kg for the past 5-6 years and hence one has to offer something better than the others to remain competitive. Both corporate and smallholder farmers should respond to international demand with required products in required quality and standard at competitive prices. At present, over 35 countries grow tea and Sri Lankan producers should recognise this competition from other producing countries and supplying a unique product that cannot be matched by others is the way forward for the industry.

Today, about 70% of Sri Lanka tea production comes from smallholders. It is important that they be educated on the requirements of foreign consumers and the required quality standards.

Sri Lanka tea exports in 2019 totalled 292.6 million kg against the volume of 282.3 million kg in 2018.

At present, the growth of the tea export sector is restricted by the availability of tea locally.

Exporters run a business targeting the global market and therefore, they should be allowed to select the type of tea they want to market without any restriction.

It is important that producers give them a quality product as per the market requirements and government allowing them to import any other type of tea for value addition and branding.