Tea, coconut and rubber are the major agricultural exports of Sri Lanka. The local and international demands for these exports increase daily, necessitating the need for a strategic review in order to assure the sustainable growth of these exports. Among all three products, tea is the highest demanding product in the international market. The cost of tea production is increasing whilst the market demands for more and more lower prices. When the modern technology engaged in tea production is concerned, the cost of production is very high in comparison with other agricultural products.
Sri Lanka tea is consumed by many tea lovers all over the world, especially in Europe, Asia, Middle East, etc.
However for the product to remain competitive among the global tea exporters we must focus on new strategies. In addition to the quality standards maintained in conventional tea industry, the percentage of value addition to the product should be gradually increased, to give a differentiated product to the market. It helps to create a high competition among core competitors. The value addition should be executed in a manner to fulfill strong consumer requirements and environmental protection. Using an eco-green system in production to combat global warming, maintaining bio diversity in plantations, offering social responsibility to the workers, convenience and sensory satisfaction are some of them.
Value addition to tea
Value addition can be done initially by primary production procedures. Production methods of organic and bio dynamic add value to the tea, as a bulk production. The best value addition that could be done is the convention of tea production to organic tea which is about 100% against 2.5% for conventional tea. Demand for organic products is rapidly growing mainly due to health concerns of consumers in the developed importing countries. The important thing is changing market pattern and strategies towards other sectors such as Europe, North America, Canada and Japan which result in minimizing the high risk of market domination by CIS and Middle East and enjoying higher revenue from tea exports to secure western markets mainly in value added form.
Packing tea into bags in many forms has become very popular because of convenience and it can be considered as an effective form of value addition. The use of environmental friendly packaging materials which are bio-degradable, recyclable and reusable is a favourable factor in tea marketing. Great care must be taken to select materials with non-predictable barrier properties to moisture and flavour which maintain quality standards and the freshness of tea for desirable shop shelf and consumption period.
Flavouring of tea using natural mixture of spices, herbs and extracts in liquid or granulate form has become very popular in most of the market segments of specially teas. Strong artificial flavours are also used widely to flavour tea. Conventional tea is without any significant health risk since the percentage of artificial flavour used is very small.
Actually, assurance of quality is a form of value addition to tea, which guarantees production quality and the safety standards to customers. Quality monitoring play a major role in monitoring such procedures in tea production when forced to adhere to food hygiene and other quality parameters which provide assurance of food safety to customers in developed countries.
EU consumers are looking for reliable suppliers who can supply them on a regular basis, at a good price with consistency in quality. Developing country exporters must therefore be able to supply at a consistent level of quality and according to agreed specifications.
Another factor is traceability of origin that makes it possible to track and trace product throughout the production chain. This entails heavy registration monitoring and controlled process.
When producing quality to products we are obliged to fulfill our responsibility towards customers by maintaining the quality standard levels from the very first step of the production process. Another significant factor is quality certification such as ISO 9000, ISO 12000, etc. Having the certification will improve the confidence of customers in the particular product. Supply chain management is very important, because the availability of the product in the market is paramount. The product will go through several value addition levels before it reaches the end consumer. But the product should always be available no matter whether a local market or an international market, because availability assures good quality.
Having such characteristics will create high demand and will also provide a competitive edge in the world market.
A strong foundation should be laid by Sri Lanka Tea Board to support and guide local producers to reach the needy quality requirements, by introducing Ceylon quality certificate for the long term sustainability of our tea industry.
Installing new technological is now more essential than ever before, to introduce new types of tea for the special niche markets. There is a great demand for such tea. Consumers select alternative tea such as Rooibos, Heneybos and other herbal teas that do not have the presence of caffeine. Consumers are becoming more and more health conscious. Price is no barrier for exclusive and innovative teas in the global tea market.
Value addition along with satisfying future quality requirements have become good future investments for tea accessing the ever growing special and higher segment for the rich tea consuming world.
Competitive global tea market
It is time that Sri Lanka should be concerned about the present and the future of the local tea production. Tea business is indeed maintaining a fit between green and sustainable growth of the product. Since the increase in exporting tea volumes means an increase in GDP (gross domestic production) level, a higher market competition should be maintained internationally while surviving high profit levels.
(The writer is studying international transportation and logistics management. He could be reached at email@example.com)