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Bigger demand, better price for Sri Lankan tea

Wednesday, 13 May 2009 - 1:02 PM SL Time
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There was a shortage in the supply of tea due to the global recession during the latter part of last year in the country and there was also a significant drop in demand as well in the industry in the past few months.

However, today the supplier chain is performing well and there is an increase in demand as well as price for Sri Lankan tea in the international market, said Chairman, Tea Export Association, Rohan Fernando.

Tea has become a basic human need and it is an essential product for people s day-to-day life. Sometimes there are fluctuations in demand as well as supply due to economic instability.

Due to the economic recession, the effect on the industry is very low compared with other industries in the country.

There s always a silver lining in every dark cloud. Due to the world economic crisis most of the top competitors in the market could not survive. Therefore, there are many opportunities for countries such as Sri Lanka in the market, he added.

Before the economic downturn around the globe, we produced 7,000 to 8,000 Kgs per week for export from the total production of tea, he said.

However, during the past four weeks it dropped to 4,000 to 5,000 Kgs per week. Therefore, the main reason for the price increase for Sri Lankan tea in the international market can be the higher demand, said Chairman, Sri Lanka Tea Board, Lalith Hettiarachchi.

Even during times of recession, we maintained the same level of good quality tea. This can be one of the main reasons that Sri Lankan tea industry is well established in the international tea market.

The highest volumes of tea production in the country are purchased by Russian and Middle East countries and there are many value added products available in the international market as well as local market such as packeted tea, flavoured tea, branded tea and green tea.

Three years ago of the total volume of exported tea, 30 percent was value addition tea and 70 percent bulk tea. Today we have increased these percentages - 42 percent value addition tea and 58 percent bulk tea. This is also one of the main advantages to sustain in the business, he added.

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