Business Times

PBJ opposed to multi-tea blending proposals

Treasury Secretary Dr P.B. Jayasundera this week expressed his opposition to moves by some tea exporters for Sri Lanka to open out to multi-tea blending options. Proposals have been to permit Sri Lankan exporters to allow tea imports for blending purposes, a proposal that is opposed (for many years) by growers and companies like Dilmah.

On Tuesday, speaking to some 200 foreign delegates at the biennial Dilmah Tea global distributor conference in Colombo, the Treasury Secretary offered clear strategy guidance to the Sri Lankan tea industry.

Referring to industrial zones overseas where teas from many origins are blended, Dr Jayasundera stated, "Sri Lanka does not believe it should get into that marketing strategy. Sri Lanka should not permit our product to be used in that manner in the global market." His comments were released by the company to the media.

"One product we should uncompromisingly preserve and protect is Sri Lankan tea. Dilmah has shown that all facets can be developed locally. That is the philosophy of this government. We believe Sri Lanka has a tremendous comparative advantage in tea and can make it a 3-billion dollar industry in the next 10 years," he told delegates.

Referring to the current just over 1 billion dollar annual exports from 325 million kg, Dr Jayasundera stated that this was a gross under-estimation of the industry, referring to the fact that exports 'under premium priced Sri Lankan brands is still very low and the dominance of bulk and price based trading'.
He said the imports of cotton and textiles were initially encouraged as raw material was not available locally. He stated that apparel was now moving to the upper end of value-added and that he was encouraging local textile manufacturing to backward integrate and increase value added.

"Tea is the opposite. Everything is here," noted Dr Jayasundera, referring to the climatic advantages of growing tea in Sri Lanka, the two million employed and smallholders growing over 70 % of the tea. "But he bemoaned the fact that despite the many advantages, tea was not as large an exporter as apparel. He expressed the hope that the two industries would converge in the 10 years whereby both tea and apparel would be similar in size with tea a 100 % value added, fully locally sourced product with absolute integrity and apparel working backwards to manufacture textiles locally and growing cotton," he was quoted as saying.

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