- SLTB Chairman Niraj de Mel says inaugural Colombo Tea Auction for 2024 reports favourable prices creating optimism for year ahead
- Says too early to set specific export target for 2024, maybe post-April
- Estimates tea export volume dropped below 2022 levels in 2023 to around 242 million kilos, whilst earnings increased to $ 1.3 billion
- Calls on industry stakeholders and state institutions to collaborate to achieve industry’s common objectives
- Encourages RPCs to explore AI and drone technologies to enhance yields
- Says Tea Control Act will be a powerful tool to boost production and productivity in RPCs
- Insists exporters to look beyond supermarket shelves to high-end specialised products, market segments for higher earnings
- Affirms responsibility lies with exporters to convince growers to prioritise producing high-quality Ceylon Tea
By Charumini de Silva – DailyFT
Sri Lanka Tea Board Chairman Niraj de Mel outlining plans for 2024 yesterday insisted on the need for a strategic, unified approach to achieve common industry objectives, emphasising the importance of collaboration over working in isolation.
With the successful inaugural Colombo Tea Auction for 2024, he expressed optimism disclosing that market sentiments are promising for the upcoming year.
The tea auction for 2024 was initially slated for Tuesday and Wednesday but faced a brief postponement to Thursday and Friday due to confusion surrounding SVAT and VAT registration.
“Despite the scepticism the market reported favourable prices at the first auction,” de Mel told the Daily FT.
Underlining recent tax changes, he noted that except for green-leaf tea, all other varieties are now subject to taxation.
Noting that it is too early to set a specific export target for 2024, de Mel said the Board will be in a position to provide a more accurate forecast post-April.
“April marks the onset of rainfall, initiating the harvest season in the market. i hope the prices will also stabilise with winter buying which takes place mostly towards the sec- ond half of the year,” he added.
He believes Sri Lanka’s tea export volume dipped below 2022 levels, reaching around 242 million kilos in 2023, whilst earnings increased to around $ 1.3 billion during the same period.
As per the available data, January-November 2023 cumulative exports totalled 221.16 million kilos, showing a decrease of 9.73 million kilos vis-à-vis 230.89 million kilos in the same period in 2022. The SLTB was optimistic that the tea output will exceed 260 million kilos by the end of 2023 recovering from the 26-year low in 2022.
De Mel attributed the decline in output to adverse weather conditions from September to December 2023, emphasising that most of the production came from Regional Plantation Companies (RPCs) rather than traditional smallholders due to high operational costs.
Moving forward, the Tea Board Chief stressed that the industry stakeholders along with the responsible Government institutions need to work in tandem to regain the status as the world’s cleanest tea while focusing on high-value markets.
“We need a cohesive plan to achieve the industry’s common objectives, rather than working in isolation,” he stressed.
He was of the view that Sri Lanka should focus on strategic market campaigns on tea-consuming nations rather than focusing on global campaigns till production and productivity are achieved.
Expressing concern about the lack of technological integration in the tea industry, de Mel encouraged top players with financial backing to explore alternative ways, including AI and drone technologies to enhance crop yields.
“Although the technologies may not come in cheap, the RPCs must at least need to have a plan to introduce those into the production process at some point. Sadly, that planning is lacking among the RPCs. If the RPCs planned and implemented their labour commitments yields would have been higher and it would also give confidence to the foreign investors,” he claimed.
De Mel also said the SLTB hopes to make use of the powerful Tea Control Act to enhance production and productivity in RPCs.
In terms of exports, de Mel asserted that it was high time tea exporters looked beyond supermarket shelves to sell high-end specialised products rather than focusing on mass production.
“Sri Lanka has a diverse tea production suitable for different water types to enhance taste and nutritional properties. These can be marketed according to various market segments to generate higher income from tea exports,” he said.
He stressed the responsibility of exporters to convince growers to prioritise producing high-quality Ceylon Tea.