Sri Lanka govt pledges more funds from tea export tax

Sri Lanka's new plantations industries minister has promised to give the tea industry more of the funds collected from a tax on tea exports.Mahinda Samarasinghe said his plantations industries ministry was having talks with the government treasury on ways to plough back into the tea industry a bigger share of the funds collected from the tax. 

 

The industry has repeatedly complained it is starved of funds raised from an export tax of four rupees a kilo on tea shipments.

The funds were meant to help with replanting, factory modernization and promotion of tea in export markets.
Sri Lanka exports about 300 million kilos of tea annually but in recent years the industry has received only a negligible amount of the total funds raised from the export tax known as a cess.Samarasinghe said the industry has received some of the funds but acknowledged that not enough had been given for capital expenditure.
"Some benefit has been given to the industry," he told a news conference. "But we have not been able to use 100 percent of the cess as capital expenditure. Recurrent expenditure has also been financed by the cess.
"Now we’re talking with the treasury on ploughing back more of the cess money as capital expenditure. We're also looking at alternative income generating avenues so these monies can be ploughed back for the development of the industry especially capital expenditure."

Sri Lanka tea exporters have warned that the government's failure to allocate cess funds collected from tea exports for brand building was eroding their competitiveness as rival origins step up marketing efforts. The funds were previously monitored and money disbursed by a committee of officials from government and the tea trade.

But in recent years the cash-strapped government changed the rules, dismantling the committee and sending the funds to the general government treasury.

Source: Apr 17, 2010 (LBO)

Sri Lanka tea market seen strengthening

 Sri Lankan tea prices seem to have bottomed out and are likely to gradually rise in future sales as crops come down and global demand remains strong, brokers said. Tea prices rose at this week's Colombo auction as volumes fell and quality improved. 

"With crop intakes from most plantation regions easing, and quality also showing an improvement, we believe that we have seen the bottom of the market and expect auction prices to keep moving up gradually as seen at the recent sales," brokers John Keells said.They reported crops as being "moderate" in all planting districts.
"After a run of depressed prices particularly in the month of May, the producers would welcome the ascending prices witnessed at the last two sales," the brokers said.

"The current demand seen at the Colombo auctions is a clear indication that global demand is sufficiently buoyant."Low grown teas cultivated in the south mainly by small farmers met with "excellent demand" at this week's sale, they said.
"In spite of the large volumes that we have seen in the recent past, prices for the best on offer appreciated in value, whilst the below best varieties in the leafy category too maintained last levels with the exception of the Pekoe1 grade."

Forbes & Walker Tea Brokers said crops seem to be easing in most 'high and mid-grown' elevation planting districts. "Consequently, auction quantities are likely to record a gradual decline in the ensuing sales, particularly in respect of the High and Mid-growns," they said."Therefore, with a more balanced availability commencing July and through until September, it would be reasonable to conclude that prices would slowly commence to strengthen from now on."

Source: June 17, 2010 (LBO)

What is Tea?

  What's Tea?


Tea as a brew is a luminous coloured liquid which possesses a pleasing aroma and is a delicious and fragrant beverage taken hot or cold. But what really lies behind this beverage which has managed to retain, and indeed, increase its popularity over millenniam.

The Tea Plant

The tea plant (Camellia sinensis) is a species of tree related to the Camellia. Its flowers are yellow-white which bear small, hard-shelled fruits, similar to a hazelnut. The evergreen leaves are leathery, dark and slightly serrated. Given minimum annual temperatures of 18C, moderate and infrequent frosts, a uniform annual precipitation of 1,600mm and a good balance of sunshine, a tea plant can easily grow to become 100 years old. In fact, wild tea plants are reputed to reach an age of up to 1,700 years.

Two original tea plants that are known today

Thea sinensis (Chinese tea): A shrub-like plant which reaches a maximum height of 3 to 4m and can even survive frosts.

Thea assamica (Assam tea): A substantial tree reaching a height of 15-20m and growing exclusively in the tropics. The constant crossing of these two original plants forms the basis of all the tea cultures in the world today.

Active ingredients in Tea

The cheapest and most consumed beverage worldwide after water is also one of the most valuable in terms of its chemical composition – approximately 32% of its ingredients pass into the infusion.These ingredients include Polyphenols as the primary antioxidants present in tea, important amino acids like theanine, as well as fluorides.

Tea Auction News - The Mombasa Tea (Weekly) Auction - SALE OF - 07TH/08TH JUNE 2010

MOMBASA AUCTION - SALE OF - 07TH/08TH JUNE 2010

Improved demand for the 9,824,286.40 million kilos (151,692 packages) on offer but at irregular rates closely following quality and less teas remained unsold (8.75%).

Brighter BP1s were a weak feature declining by USC8 to 50 but a few improved lines gained upto USC8 while mediums were difficult of sale and were heavily discounted by USC3 to 59; lower mediums saw better absorption at about last week's levels but a few improved well made types gained upto USC30. Plainer descriptions were well absorbed at firm to USC30 dearer. Brighter PF1s met better competition at firm to USC35 dearer with improved mediums well competed for at USC7 to 22 above last week's prices but others lost upto USC10. Lower medium PF1s were well absorbed at USC10 to 26 dearer with improved plainer sorts gaining upto USC38 but poorer lines were upto USC8 easier. Brighter PDUSTs saw less interest and shed USC5 to 30 while mediums were irregular ranging between USC24 dearer for clean coloury lines to easier by a similar margin; lower mediums saw improved competition gaining upto USC36 but a few poorer invoices shed USC2 to 10. Plainer types were irregular varying between USC6 to 38 dearer to easier by upto USC15. Brighter DUST1s were rather irregular and varied between USC5 to 17 dearer for clean types but others eased by USC22 to 40 while mediums met an irregular enquiry ranging between fully firm prices to easier by USC2 to 27. Clean lower mediums were well competed for at firm to USC5 dearer but others were discounted by upto USC32. Plainer descriptions were firm to USC38 above last levels.

In the secondary catalogues BPs gained while PFs were dearer. Clean well sorted coloury Fannings were irregular but on balance easier while similar Dusts were dearer. Other Fannings were firm to dearer with Dusts appreciating. BMFs were well absorbed at dearer levels.

Pakistan Packers and Afghanistan lent strong support while Egyptian Packers re-entered the market and were quite active. There was more interest from UK, Yemen, other Middle Eastern countries and Bazaar. Iran showed some activity with less interest from Sudan, Kazakhstan(CIS) and Russia. Somalia was active at the lower end of the market.

Source : F & W Weekly Tea Market Report

Sri Lanka- January-April Tea earnings top 45.6 billion, highest ever

Tea export earning for the period of January-April reached Rs. 45.6 billion, or US$ 399 million in dollar terms, which is not that high when compared to US$ 410 million earnings in 2008. In 2008, FOB value in dollar terms was US$ 3.91 per kilo, this year it is US$ 4.39, therefore the rupee earnings this year is an all-time-high.

All indicators point to an exceptional year in foreign exchange earnings from tea and this trend is expected to continue well in to the future.

Information at hand from The Asia Siyaka Tea Brokers Weekly Tea market report pointedly suggested although crop was not as high as expected, tea earnings were rising. However 2010 to date, the ‘all time high’ tag was real and singularly outstanding.

Monthly exported quantity to date was however not quite that encouraging whereas April 2008 was exceptional with Sri Lanka shipping 105 million kilos which was a record. Sales destinations were that of Russia, or CIS countries, which continued to be highest buyers of Ceylon tea increasing their absorption by 21 percent. UAE too recorded higher import quantities, up some 5 percent. But there was no evidence on exports to new markets.

Meanwhile our export markets remain just about the same. Apart from Jordon, Chile, Japan, and Germany, most other destinations are based in the Middle East. Hong Kong has been tried, but apart from media hype about some sort of competition, there was nothing tangible emanating from that source. Not, that is, considering their draconian business and trade ethics, recorded in our Sunday edition about two weeks ago.

End April 2010, exports stood at 91.5 million kilos; of this quantity, bulk exports continued to dominate product quantities. Value additions although talked of ever so often, has not had significant impact on end user influences. Other exported forms were tea in packets at 25.5 million kilos, Tea bags, 5.4 million kilos, Instant tea 509, 000 kilos approximately, and green tea about 1.3 million kilos. There was also 2.6 million in re-exported tea, included in the export figure.

The Tea Board in their recent communication said low-growns continued to dominate production, 61.4 million kilos were produced at this elevation, where as high growns produced 24.2 million kilos, and mid growns 16.6 million kilos.

The market last week staged ‘come back’, returns. All elevations had good price resurgence. Eastern Brokers Tea report said westerns, Nuwara Eliyas, low growns, all recorded positive gains. Off grades, Dusts, and CTCs, too gained about Rs. 10 per kilo.

At this weeks sale, after quite a while, 8.2 million kilos will be on offer. Brokers said the market remains strong.

Source :The Island

Image: Jehad Nga for The New York Times