Sri Lanka sets US$3.5bn tea export target for 2030

ECONOMYNEXT - Sri Lanka is targeting 3.5 billion US dollars in foreign exchange and 350 million kilogrammes of tea production by 2030, officials said.

"Our target is 350 million kilogrammes of tea production and 3.5 billion US dollars in exports," Michael de Soyza an ex-Chairman of the Colombo Tea Traders' Association (CTTA), an industry body said at the 125th anniversary of the industry association.

He said that a workshop was held on August 09 to start the program, with presentations from experts including former Sri Lanka Tea Board chairpersons such as Rohan Pethiyagoda and Janaki Kuruppu to give initial guidance.

He and Anil Cooke, another industry veteran are leading the initiative.

Cooke, an ex-Chairman of the Colombo Brokers' Association, said that it was necessary for some such as Pethiyagoda to rein in the industry from setting too ambitious a target.

Sri Lanka's tea production has remained at around 300 million kilogrammes over the past two decades, with a peak 340 million kilogramme crop in 2013, as the country's tea growing land has remained unchanged, according to official data. Tea production in 2018 was 303.8 million kilogrammes, down from 307.1 million kilogrammes from a year earlier.

Sri Lanka still exports most of its produce as loose tea in bulk or packets, whereas the world now enjoys new products, such as instant tea and iced-tea.

Sri Lanka's tea exports have stagnated between 1 billion US dollars and 1.63 billion US dollars from 2007 to 2018, with a peak 1.63 billion US dollars in 2014.

In 2018 Sri Lanka exported 1.43 billion US dollars of tea, down from 1.53 billion US dollars in 2017.

Sri Lanka's main export destinations in the Middle East have been in flux over the past decade. African nations are also becoming more competitive than Ceylon Tea.

Cooke said that the 2030 program will create strategic pathways for the future of Sri Lanka's tea industry.

"We have reached a point where the world is becoming volatile," he said.

"All stakeholders are looking for direction."

"So, it is time for the private sector to take charge of shaping the future."

He said that each stakeholder segment such as tea brokers, exporters and planters will set up working groups to ascertain the gradual changes required in the industry.

"It is still early. We will flesh out the vision going forward," he said.

"We will drive all key areas."

"This will not be a one-off exercise. It will be an ongoing process."

Cooke said that the industry will draw on the experience of USAID's The Competitiveness Program which ran till 2007, to plan for the 2030 targets.

Meanwhile de Soyza said that the industry would also have to adopt sustainable practices to protect the environment.

Cooke said that few firms, such as Elpitiya Plantations Plc and Bogawantalawa Tea Estates Plc have fully adopted sustainable practices. (Colombo/Aug12/2019)