Imports of tea into Sri Lanka, a major export origin, is restricted because of opposition by producers who fear imported teas could reduce prices for their own product at the Colombo auctions.
But Keragala said exporters understand the concerns of producers and are sympathetic, as they themselves depend on tea cultivators for their exports.
He said exporters advocate freeing up tea imports with strict safeguards to ensure domestic producers of Ceylon tea are not adversely affected.
He suggests having a free trade zone like that proposed in a new port being built in Hambantota on the south coast where tea imports and blending could be done.
The government has said it will issue a request for proposals soon for the private sector to set up businesses in the new port, including warehousing operations.
“We must have guidelines to protect the industry,” Keragala said. “While protecting the plantations industry we must look at a free zone such as in Hambantota port where we can do blending operations separately.”Ceylon tea is the only commodity in which Sri Lanka has managed to earn a brand name internationally, Keragala said.
Several exporters have managed to set up their own brands which compete against international brands of multinationals.
“For those brands to exist they have to fight in international markets,” Keragala said. “You must allow brand owners to work with other origins teas and be competitive.”
He noted that India, also a big exporter which also had restrictions on tea imports, had eased these restrictions and was now allowing more imported teas for blending.
Sri Lanka’s re-export volumes of tea fell by half to 7.3 million kilos in the nine months to September 2009.
Tea Board officials said the fall came despite a drop in local production owing to drought that would have usually led to more imports for re-export to make up part of the local shortage..
They cited pressure by tea producers on the regulator that led to more stringent checks on imported teas which discouraged servicing of multi origin blends.