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Sri Lanka tea trade calls for limit on new factories

June 21, 2010 (LBO) - Sri Lanka's tea trade has called for a stop to the setting up of new factories unless they are supported by cultivated tea lands to prevent 'excess capacity' and competition for green leaf.
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Avi de Silva, chairman of the Colombo Tea Traders' Association, said they were concerned about the proliferation of tea factories unsupported by cultivated tea lands.
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"There are over 700 factories presently in operation, of which a very large number fall into this category," he told the CTTA's annual general meeting.

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There was a continuously increasing excess in capacity of factories in relation to the availability of green leaf supplied by small farmers.

As a result, the majority of factories are operating under capacity, creating severe competition for leaf, the CTTA says.

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But more tea factories also means that smallholders get good prices for their their produce.

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This can stimulate higher levels of leaf production.
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But the CTTA believes it hurts quality.

"This unhealthy competition has had a negative impact on the quality of the end product, which would eventually be damaging to the image of 'Ceylon Tea'," de Silva said.

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New factories continue to be set up despit

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