The Sri Lanka Tea Board is to invest over Rs 30 million this year to equip a new laboratory for the tea export industry.
The laboratory, that has already cost another Rs 30 million to build, will provide testing facilities to check for Maximum Residue Levels (MRLs) demanded by Japan and the European Union(EU).
“Sri Lanka must immediately develop capacities to test for MRLs. We have already built the laboratory. This year we are bringing down equipment and we hope to recruit more people so that companies do not have to get the tests done in other countries like Germany, which is very expensive,” said Chairman of the Tea Board, Lalith Hettiarachchi, speaking at the Colombo Tea Traders Association AGM last week.
MRL testing, that checks for acceptable levels of chemical residue, is now a mandatory requirement to export tea into Japan and the EU. Both are significant destinations for Sri Lankan tea. Japan, for instance, is considered one of Sri Lanka’s best export markets.
“In terms of volume Japan is our number 6 export destination, but more importantly we get some of the best prices for our tea in Japan. Right now we also hold two thirds of the Japanese black-tea market. So this is a very important market that we should not lose. The EU, collectively, is also a large market,” explained Mr Hettiarachchi.
According to the Central Bank Annual Report, in 2007, tea exports to Japan brought in slightly over Rs 4 billion while exports to the EU bloc brought in around Rs 12 billion.
However, to hold onto these markets, local tea exporters are now forced to get MRL tests done in foreign laboratories, mainly in Germany. To make it harder, the EU and Japan have set two different sets of standards, amounting to double trouble for developing country exporters. All in all, the tests are adding to costs and eating into profits of local tea exporters.
“Doing the tests abroad is very expensive. The testing is also time consuming. So when they have to be sent abroad it would take a lot more time. The delay can hold up exports, affecting orders,” explained Mr Hettiarachchi.
To support the industry, the Tea Board is now trying to provide MRL testing facilities locally.
“This year, we have allocated Rs 30 million to buy equipment for the laboratory. The industrial Development Ministry contributed another Rs 18 million, which will also be used to buy equipment,” said Mr Hettiarachchi.
But while equipment needs are being sorted out, human resource needs are stuck in red tape.
“We have to go through a number of Ministries to recruit. Even to fill vacancies at the Tea Board and the Tea Research Institute this is a problem, because the government is weary about recruitments. We have trained four people but we need at least another 10 personnel at different levels in the laboratory, to be able to offer these services,” said Mr Hettiarachchi.
The Tea Board is also negotiating with the Japanese and EU authorities to harmonise the MRL standards - to remove the need to meet two different sets of standards and certifications. However, the Tea Board says it may take another 2 to 3 years for Japan and the EU to accept Sri Lankan accreditation.