COVER STORY | LMD

COMPILED BY Yamini Sequeira

VISH GOVINDASAMY

Group Managing Director
Sunshine Holdings

DIVERSIFY TO PROP UP TEA EXPORTS

Sri Lanka’s tea trade went by means of a veritable wringer in 2021 on account of the ban on chemical fertilisers and weedicides. This led to a decline in tea manufacturing by roughly 18 p.c as much as October 2022 – the bottom in over 25 years. 

Because of this, tea manufacturing in 2022 is predicted to be roughly 50 million kilogrammes lower than within the earlier 12 months.

The Group Managing Director of Sunshine Holdings – who can be the Chairman of the Ceylon Chamber of Commerce – Vish Govindasamy elaborates: “Sri Lanka has seen a discount in tea imports in most of its main markets on account of low manufacturing.”

“In 2021, nearly 55 p.c of Ceylon Tea exports went to the Center East and North Africa, whereas one other 15 p.c was despatched to Russia and the Commonwealth of Impartial States (CIS),” he notes, including that “we stay extremely depending on these markets though Ceylon Tea was exported to over 140 international locations all over the world. Presently, our largest importer is Iraq, which is a marketplace for decrease worth teas.”

The scarcity of tea in 2022 implies that Ceylon Tea costs, that are already thought-about very excessive, have elevated additional, resulting in the hazard of one among Sri Lanka’s premier exports being priced out of the market.

Nonetheless, Govindasamy is hopeful that tea crop harvests could be normalised by the second half of this 12 months.

He suggests: “We should diversify, and deal with larger yielding teas and better quantity markets, to extend our market share and income; keep extra prominence in markets that may pay the next premium value – similar to Japan, the US and the EU; and achieve market share within the Center East by means of Saudi Arabia and Kuwait, as an alternative of extra value delicate markets.”

In accordance with him, Sri Lanka must also have a look at growing market share within the UK and Pakistan as they too are giant quantity importers. Nonetheless, this may imply decreasing minimal high quality requirements (ISO 3720) to cater to the kind of teas wanted by these markets.

Govindasamy notes: “Shopper developments have expanded past conventional merchandise. Since many patrons are actually concerned with prime quality merchandise, this has pushed demand for wholesome inexperienced, useful botanical teas and natural blends.”

“And in a optimistic improvement, youthful customers now view tea as a wellness drink,” he provides.

A powerful desire for useful botanical blends and single property artisanal teas has picked up by means of a pattern referred to as ‘premiumisation’ with extra curiosity in modern flavour mixtures, authenticity and the story behind a selected model.

The emergence of tea pairing menus has additionally created a buzz internationally. Groundbreaking able to go drinks and iced tea variants are difficult the new drinks class. There may be additionally a rising consciousness of social duty, moral practices and inexperienced manufacturing processes, which supply glorious alternatives for Ceylon Tea manufacturers.

Wanting forward, Govindasamy requires a sharper deal with the export sector: “With roughly 4 p.c of the land space coated in tea plantations, Ceylon Tea offers direct and oblique employment to nearly two million individuals; and it performs a major position in rural improvement, poverty discount and meals safety. Due to this fact, focussing on tea exports is a precedence for Sri Lanka’s nation constructing technique.”

And he exults that “we will additionally proudly say that Sri Lanka is excessive on the environmental sustainability agenda with the world’s solely licensed ozone-friendly tea; an trade working to scale back its carbon footprint; and satellite tv for pc mapping to mini­mise the influence on Sri Lanka’s forests and water provide.”

He provides that Sri Lanka wants to keep up a world provide of not less than 300 million kilogrammes of tea and enhance it from thereon. “If we will keep this, the outlook shall be very optimistic as prices will come right down to extra aggressive ranges,” he muses.

Lastly, Govindasamy requires a diversification of tea exports by making the most of decreased freight prices and the devalued rupee, to make sure that Sri Lanka turns into a aggressive as a producing location.

Since many patrons are actually concerned with prime quality merchandise, this has pushed demand for wholesome inexperienced, useful botanical teas and natural blends