COLOMBO, Sri Lanka
Sri Lanka’s cabinet has approved a five-year tea export program on the recommendation of Minister of Plantation Industries Mahinda Samarasinghe.
The minister told Parliament that revenue from exports will top $1.5 billion in 2011 with about 70 percent of this production from small scale tea growers.
The minister set an ambitious production target of 335 million kgs of tea by 2017, a number that he hopes will increase to 341 million kgs in 2022 with 347 million kgs in 2027 and 350 million kgs in 2030.
Click here to download and review the Export Development Board’s Strategic Plan through 2015.
Current production is 331 million kgs. Almost 90 percent of that is exported, earning Sri Lanka $1.3 billion so far in 2011. Unpredictable weather interfered with the harvest and political upheaval harmed exports but yields have risen to an average 1,603 kgs per hectare and Ceylon remains one of the world's most desired teas.
Small holders skilled in producing specialty teas are critical to the success of the export plans. Global competition is fierce with record prices and a preference for high-value tea among emerging middle class consumers. Sri Lanka possesses a well-developed bagging, packaging and shipping industry and a great reputation for quality that adds value and distinguishes its tea in the export market.
"I believe that the potential for these types of teas is enormous," says Lalith Guy Paranavitana, founder of Empire Tea Services in Columbus, Ind. and a former tea estate manager in Sri Lanka.
"Beyond the immediate technique of producing teas of character, the involvement of workers at the grass roots level can become a cottage industry that people in the remote area of Sri Lanka can get involved in, thereby promoting a communal spirit and improving the lives of the community as a whole," he says.
"The larger tea factories in Sri Lanka are not capable of producing artisanal teas due to the type of machinery that is available and also because the type of cultivars that have been propagated are bred for higher yields and less for flavor," says Paranavitana.
Demand for lower grade teas used in the manufacture of tea bags has led factories to disregard the specialty tea sector. That strategy is being questioned by government and tea industry leaders and specialty growers engaged in the authentic orthodox manufacture of premium teas are now encouraged and fostered.
Small holders are concentrated in rural and mountainous areas suitable for tea but lacking factories.
"The government should encourage cottage industries, where small holders can process their own tea leaves with the basic machinery and be able to produce the artisanal teas for the Western markets," he says.
Paranavitana cited Bernard Holsinger (SEE: Artisanal Small Holders, below) as a model 21st century tea planter. Sri Lanka's tea industry should encourage the development of miniature machinery geared toward smallholdings and train them to manufacture artisanal tea to achieve these goals, he says.
"Entrepreneurship is key to the development of the tea industry of the future. It is time that small producers are given the opportunity to manufacture their own tea leaves and not merely sell the leaves to the nearest bought leaf factory for a pittance. This would stimulate the creativity of individuals and you’ll never know what innovative teas might be produced in the future," he says.
The Export Development Board strategic plan notes that 38 percent of the total export earnings of Sri Lanka were derived from European Union member countries with 24 percent of total exports derived from North American Free Trade Area [NAFTA] dominated by the USA, during 2009.
An analysis of key markets ranked North America promising in light of a changing export market. The report notes trade in tea following Free Trade Agreements with India and Pakistan, were "disappointing" and that European trade for tea in bulk dropped significantly (-35.6 percent) while tea packets registered a marginal drop of 1.4 percent in 2009.
“Sri Lanka’s exports to SAARC countries remained low at 6 percent, while exports to other Asian countries accounted for 9 percent of total exports of Sri Lanka. Exports to CIS countries, which are our main importers of tea, absorbed only 4 percent of our total exports in 2009,” according to the report.
Middle East countries form the main export market for Sri Lankan tea and account for 10 percent of value of total exports. However uprisings throughout the Middle East badly disrupted tea shipments this year and led to new emphasis on exports to North America, Europe and Russian/CIS countries.
Seventy-eight percent of Sri Lanka’s annual tea exports of 300 million kilos are sent to Iran, Iraq, Syria and Libya both in bulk and value-added form. During the first six months of the year only 30 percent of the normal export totals were shipped. Tallies climbed to normal in recent months but the port of Tripoli, in Libya remains closed which hampered Sri Lankan sales.
Egypt is a major tea consumer but the revolution there was not as disruptive since Egyptians prefer African grown-tea.
Sanctions against Iran curbed sales to that country and the War in Iraq remains troublesome. Ten years ago Sri Lanka supplied 65 percent of Iraq’s tea, a number that fell off considerably during the height of warfare. This year the Iraqi buyer kept active at the weekly Colombo tea auctions. Iran, which is hampered from making payments due to financial sanctions imposed by the United Nations, also continued to purchase Ceylon tea with the aid of the Bank of Ceylon. Traders meanwhile are relying on shipments via camel train that are more difficult to intercept than by sea. Annual exports to Iran average 28 million kgs and were up by 36 percent during the first part of the year, according to reports in the Sunday Times in Colombo.
Global tea production was 4,160 million kgs last year with Sri Lanka contributing 17.3 percent of the global production total and 23 percent of the export total. Last year tea’s share of Sri Lanka’s total export earnings was 15.6 percent, according to Samarasinghe. He told the Asian Tribune that tea exports had increased 16.1 percent compared to 2009. Production that year totalled 308 million kgs according to FAO the Food and Agricultural Organization of the United Nations.
The approved five-year plan has several objectives, according to Samarasinghe. These include:
- sustaining the current demand for Ceylon Tea in vulnerable markets and meeting increased demand in potential markets;
- rebuilding the image of Pure Ceylon Tea and create the environment to reach the consumer;
- creating awareness at the consumer level of the "Lion Logo" Trade Mark; and
- enhance demand for Pure Ceylon Tea packed in Sri Lanka and marketed globally.
Source: Asian Tribune, Sunday Times (Colombo), FAO
| Artisanal Small Holders Holzinger, 64, is representative of a promising entrepreneurial group of Sri Lankan small holders. After retirement he purchased some mid-elevation land in the Kandy Region near Nawalapitiya and cultivated new tea bushes around his bungalow. His garden has since grown to more than five acres. The cultivars that he selected are high quality Norwood 2 and TRI 2043 which are renowned for their flavor. The TRI 2043 clone is ideally suited for white tea. Holzinger's teas are exceptional because they are produced in very small batches on equipmet he designed and assembled with the help of a friend with an engineering background. The result of this innovation is that he is able to monitor the processing very carefully and control all aspects of withering, rolling, fermenting and drying with care, so as to produce teas worthy of being classified as truly artisanal teas. He produces mainly black tea with tip (small buds), sometimes Gold tip and at other times Silver tip, that opens with a bright color in cup and a delectable flavor only possible with the type of cultivars that he has propagated. These exceptional black teas are only sold privately and not available through the auctions. The white teas that he produces with the TRI 2043 cultivar has down-like hairs larger than the average white tea. The light brew is of superb clarity and exceptional flavor. It is possible to get at least 3-4 infusions from these white teas. As a tea planter, he is well aware of the role that weather plays in the quality of tea and meticulously times the harvesting of leaves for dry weather. Thereafter, he uses his experience in tea manufacture to control the process so as to extract the best flavor from the leaves for that time of season. These are truly rare teas from a country that is primarily a conventional tea producing country. — Dan Bolton |