By Steve A. Morrell
Over the past two weeks, there were comments on dwindling tea crop returns from the smallholder sector mainly concentrated in the low grown elevations.
It will be recalled that as far back as September last year, Rohantha Athukorale, serving with the Government’s Economical Council under the Presidential Secretariat cum with the Secretary to the Treasury, said at the Ceylon Planters’ Society Seminar, the projected US$ 2.5 Billion income from tea by 2016, would not be achievable. He pointed out that with the supply constraint at 300 to 325 million kilos annually not expanding, increasing the supply chain will be a daunting task.’
Six months later his prophesy is progressively and painfully getting to be alarmingly real.
According to the John Keells Holdings Tea report last week , the tea smallholder sector, hitherto the prop of the tea industry, producing about 65% of the industry’s production, had shown decline. This was confirmed by the Tea Board when they published this year’s February results.
Athukorale in his referred presentation further said, "One way out is by way of the Tea Hub concept’. What he said then was the establishment of Sri Lanka being a Tea hub, where import and re-exporting tea would be big business. Dubai is now a Tea hub, without even a single tea leaf being produced.
Subject to certain controls this should be actively considered for future planning to take the Industry to a higher plane, he said.
In complete contradiction to this suggestion we have had reports last week that a tea exporter down -graded the concept of import, blending, and re- exporting tea . This particular exporter had circularized most estates that the industry would be in reverse mode and the Ceylon Tea Brand would be in danger of extinction. He, however, did not suggest an alternative plan to revive the industry.
We discussed this aspect of the Ceylon Tea Brand being affected, with a shipper. He said ‘Ceylon Tea’, purportedly being the best in the world was now relegated to the realm of ancient mythology. What matters now to most buyers is the price they would pay for their tea. Traditional buyers have moved away from ‘Ceylon Tea’, notably Pakistan and Egypt, who have now turned to Kenya, which sells at half the price.
Irrespective of bilateral talks with Pakistan that they would increase their absorption of Ceylon Tea, there has not been any impact on imports ex Sri Lanka of the Ceylon Tea Brand. Pakistan continues to import just about 1.5% of their tea from Sri Lanka. Kenya accounts for about 58% tea imported to that country. Similarly, Egypt too buys their tea from Kenya.
Coupled with low productivity and a belligerent workforce there does not seem to be any new ideas that surfaced.
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