Sri Lanka tea bag exports fall

(L-R)- Mr. Waruna Sri Dhanapala, Acting Secretary, Ministry of Digital Economy; Dr. P. Nandalal Weerasinghe, Governor, Central Bank of Sri Lanka; Hon. Chathuranga Abeyasingha, Deputy Minister of Industry and Entrepreneurship Development; Dr. Hans Wijayasuriya, Chief Advisor to the President on Digital Economy; Ms. Azusa Kubota, Resident Representative, UNDP in Sri Lanka; Hon. Eranga Weeraratne, Deputy Minister of Digital Economy; Hon. Professor Chrishantha Abeysena, Minister of Science and Technology in Sri Lanka; and Fadhil Bakeer Markar, Team Leader, Strategic Engagement, Digital and Innovation, UNDP Sri Lanka

July 02, 2010 (LBO) – Shipments of tea bags from Sri Lanka to Russia, the main market for tea, the island™s biggest export commodity, have fallen as high import duties on value added teas deter exports, latest data showed. The share of value added tea exports to the Russian market has been falling in recent years owing to high import duty on packet teas and tea bags imposed by the country to develop its own packaging industry.

Asia Siyaka Commodities said in 2009 the Russia / CIS market packet tea percentage was 12 percent while the market for tea bags was a much higher 18 percent share.

In 2008 the packet tea share was 17 percent and tea bags were a substantial 25.5 percent, the brokers said.

In 2008 total exports of tea bags to end-May was 7.69 million kilos of which the Russia / CIS market absorbed 1.96 million kilos.

But by 2010 imports in tea bags had declined 47 percent to a mere 1.04 million kilos.

In comparison bulk tea imports to this market were 15.2 million kilos against 16.3 million kilos this year. A review of the different segments that make up tea exports during the period January May 2010 by brokers Asia Siyaka Commodities shows bulk tea exports made up 54 percent or 62.