Sri Lanka losing Arab market, tea exporter warns

Aug 16, 2010 (LBO) – A top Sri Lankan tea exporters has warned that Ceylon tea was losing market share to international brands in key Middle Eastern markets to which shipments from the island have fallen. Ceylon Tea Services chairman Merrill J. Fernando said the tea industry needs a stable policy, direction and expertise if it is to play a significant role in the economy.

Ceylon Tea Services had a good year last year with sales and profit up while the outlook showed higher revenue this year as well, Fernando told shareholders in the company’s annual report.

The company, which exports under the Dilmah brand, said net profit shot up 150 percent to 1.2 billion rupees with sales up 11.6 percent to 4.9 billion rupees in the financial year to March 31, 2010.

Fernando said inadequate marketing of Ceylon tea had made room for competitors to make inroads in markets in the Middle East, one of the two main markets for Ceylon tea, the other being the former Soviet Union countries.

“It is quite remarkable that tea prices reached highest ever levels, disregarding the fact that, Middle Eastern markets, captive to Ceylon tea for generations, are deserting Ceylon tea for aggressively promoted and mark