By ChannaFernandopulle
“Tea availability is out of line with what we have seen in the past due to unpredictable weather conditions,” Niraj De Mel, Chairman of the Tea Exporters Association said.
Commenting on reports that Kenya, one of Sri Lanka’s largest competitors in the industry is expected to see a decline in tea production over the long term De Mel said: “Definitely global warming is having an impact and we have to see what patterns it’s going to take. When we have seen a dip in production, Kenya has normally seen an increase and vice versa. We have seen years of crop shortfall many times before and it augers well for Sri Lanka if Kenyan tea is having a crop shortfall.”
Kenyan tea, more than Sri Lankan tea, is used in tea bags. De Mel said that whilst this is the case he is confident that a drop in Kenyan production would mean more buyers seeking Sri Lankan tea.
According to De Mel, bulk exports are still doing well despite having the tea cess increased by Rs 6 for bulk shipments and a promotion levy of Rs. 3.50, largely due to the fact that this increase has been incorporated into the sale price.
De Mel stressed that all of this had to be viewed in the context of a stronger Sri Lankan rupee and a weakening US Dollar.
When asked about whether the gradual return to normalcy in the middle-east has been reflected in the tea exports to the region, De Mel responded by saying that what has been shipped to the region is lower than last year.
Taking Libya as an example, De Mel said that due to a lot of uncertainty in the Port of Tripoli, vessels were not able to berth. The resultant chain reaction was felt even in Sri Lanka.
Syria is another country facing internal turmoil and Iran whilst not having such problems has been facing sanctions. Both situations have been an obstacle to Sri Lankan exports since both countries are important tea markets.
“Except for Libya, all those countries have imported more tea but exporters have been exposed to all these risks. All of these factors have resulted in irregular prices at the tea auction as opposed to last year where prices were generally uniform. These are ground reality situations which have an impact on the overall picture.”
De Mel went on to say that while he is hopeful for the future of the industry, even if the situation in the middle-east were to stabilize in the near future, it would still take a couple of months to see that stability is reflected in the tea industry.
source - www.dailymirror.lk
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