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  • Claim amount of tea production hampered due to fertilizer ban
  • Saying decline in tea exports and foreign exchange earnings is inevitable
  • Point tea exporters face issues in Japan, Taiwan and EU over MRLs
  • Call for immediate corrective action
  • Exchange rate volatility has caused loss of uncertainty for exporters, opportunity to increase market share globally

The Ceylon Tea Traders Association (CTTA) this week raised the red flag on policies negatively impacting production, adding that a drop in quality would lead to loss of global market share.

He reiterated that the government’s decision to ban the use of chemical fertilizers and agrochemicals from May 2021 seriously worried the tea industry.

“The quantity offered at the weekly auction has shown signs of decreasing, while the quality characteristics have also registered a notable decrease,” CTTA President Jayantha Karunaratne said at the 127th General Assembly on Wednesday. annual (AGM) of the Association.

Collectively, the industry believes that the decision to ban the use of chemical fertilizers and agrochemicals has started to have a negative impact on the industry.

“Ceylon tea” is marketed worldwide for its unique characteristics in terms of blackness and flavor profile.

“Any decline in the quality of Ceylon tea will have serious consequences, where Sri Lanka’s market share in the world arena will drop. As a result, a decline in exports and foreign exchange earnings is inevitable, ”he warned.

The Colombo Tea Auction continues to maintain the highest average tea price compared to all other global auction centers. Colombo’s average tea sales from January to August are Rs. 618.80, compared to Rs. 622.67 in 2020. Tea exports total 187.6 million kg compared to 174.1 million kg in 2020, registering positive growth.

Karunaratne also said tea exporters to Japan, Taiwan and the EU are facing issues regarding maximum residue limits (MRLs). “The CTTA with all stakeholders proposed to introduce a system of communication between exporters and producers pending immediate corrective action,” he added.

High exchange rate volatility has caused uncertainty and losses for exporters and lost opportunities to increase their market share in international markets, he said, adding that the dollar rate quoted by commercial banks does not reflect the actual value.

“One-off payments received by exporters are suspended by US intermediary banks. These payments are sometimes delayed by two to three weeks without any credit being given to the exporter, ”he said.

Karunarathne noted that some companies have ventured into new ventures, with new machinery, factory expansions, and market expansions with borrowed funds. The cash flow forecast has changed with the current circumstances due to the pandemic. “There should be initiatives and encouragement from the authorities for such projects to continue without being abandoned,” he said.

CTTA President also said that exporters are currently facing new challenges as major importing countries depreciated their currencies, capacity and freight rates in shortage of equipment on major trade routes increased by 400% at 500%.

He urged the authorities to provide better service in Colombo to attract more shipping companies in the long term.

“The tea trade has resisted over the years and we will continue to be innovative while contributing to the country’s economy with increased export revenues,” Karunaratne stressed.

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