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Sri Lanka, India in tea import deal

Sept 02, 2008 (LBO) – Two of the world's biggest tea exporters, Sri Lanka and India, have signed an agreement on tea imports into each other's countries, news reports said. Sri Lanka tea industry officials also said exports of Ceylon tea to India had for long been held up by red tape and other restrictions under the FTA, although these had now been removed.

They also said another reason for the limited amount of export to India may be because Sri Lankan tea prices are higher than in India.

India is essentially a CTC (cut, tea and curl type teas used in tea bags) market while Sri Lanka is an orthodox tea market, the newspaper said.

Sri Lanka last year exported 1.2 billion worth of orthodox tea and is looking to increase earnings to 1.5 billion dollars this year.

India™s total tea exports last year were worth 500 million dollars by comparison.

However, India is one of the world's top two tea producers and most of her production is consumed by the domestic market, leaving very little available for export.

Banerjee also said India would end the year with an orthodox production of 90 million kg, up 7-8 million kg from last year.

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