1. Twenty First Session of FAO/IGG ON TEA
SRI LANKA TEA INDUSTRY
MARKET REVIEW
Bandung, Indonesia, November 2014

2. Janaki Kuruppu
Chairperson - Sri Lanka Tea Board

3. Source : ITC Report, London

4. World Tea Production (Mkgs)
 Country
2006
2007
2008
2009
2010
2011
2012
2013
Sri Lanka
310.8
304.6
318.7
291.1
331.4
327.5
328
340
YOY % -2
4.6
-8.6
13.8
-1.2
-1.5
3.6
China
1028.1
1140
1257.6
1358.6
1475.1
1550
1790
1924
India
981.8
986.4
980.8
979
966.4
988.3
1126
1200
Kenya
310.6
369.6
345.8
314.2
399
377.9
370
432
Vietnam
142.5
148.3
166.4
175
170
178
190
180
Turkey
142
155
153
148
145
147
149
World
3579
3795
3863.5
3944.4
4162.5
4217.1
4907
YOY% 6
1.8 2
5.5
1.3
9.6
6.1
Source : ITC Report, London

5. 20th Session of FAO - IGG on Tea
At the 20th session in Colombo under the Chairmanship of Sri Lanka, 3 new working groups were proposed:
Working Group on Organic Tea
Working Group on climate change
Working group on Small Holder Farmers

7. So why an International Tea Producer Forum?

8. Vision and Mission of the ITPF
Vision To position tea as the most acceptable, natural and healthy beverage globally Mission To position tea as the most preferred beverage universally through stimulating its consumption by facilitating and execution of generic promotional campaigns and raising awareness of the health and life style benefits of tea

9. Objectives of ITPF
a. Safe guard interests of tea producer countries. b. Deliberate and evolve collective solutions on problems affecting producers. c. Provide technical co-operation, sharing of technology and expertise by member countries. d. Stimulate demand for tea by promoting consumption of tea. e. To undertake market studies, surveys, research projects aimed at addressing any specific issues f. To undertake and facilitate programs for providing training to members or their executives in various aspects of marketing tea.

10. Progress So Far
2012: Signing a Resolution in Colombo, Sri Lanka at the 20th Session of FAO/IGG to form an ITPF.
10 Countries namely India, Kenya, Sri Lanka, Indonesia, Bangladesh, Malawi, Rwanda, Tanzania, Iran & Burundi signed that MOU.
Proposal by Sri Lanka as the current Chair of FAO/IGG on Tea to host a Ministerial Forum.
2013: Historical gathering in Colombo on 21st January and ITPF was formally established.
Seven countries signed the MOU and the constitution (Sri Lanka, India, Kenya, Indonesia, Malawi, Rwanda, Iran)

11. Consent of Producer Countries
Country
2008
2012
2013
2014
India
Obtained Govt. approval
Signed Resolution
Founder member
Obtained cabinet approval and completed the process
Sri Lanka
Kenya
Response is awaited
Malawi
Rwanda
Pending
Indonesia
Iran
Bangladesh
Consented to be founder member
Tanzania
Burundi
---
Zimbabwe
Consent of Producer Countries

12. Sri Lanka Tea Production

13. AGRO-CLIMATIC TEA GROWING REGIONS OF SRI LANKA

14. Tea Production – Elevation Wise
Source : Sri Lanka Tea Board

15. SRI LANKA TEA PRODUCTION ELEVATION WISE (Mn. KGS)
Year
High
Grown
(%)
Mid
Low
Total
2006
74.7 24
51.6 17
184.5 59
310.8
2007
72.5
54.4
177.7
304.6
2008
84.4 26
49.0 15
185.3
318.7
2009
72.8 25
44.7
173.1 60
290.6
2010
79.1
56.1
196.2
331.4
2011
79.2
52.5 16
196.6
328.4
2012
73.6 22
52.6
202.1 62
2013
75.5
56.2
208.4 61
340.2
Source : Sri Lanka Tea Board

16. AREA OF TEA PLANTED IN SRI LANKA
Elevation
Planted (Ha)
Share (100%)
High Grown
41,137
19%
Mid Grown
71,018
32%
Low Grown
109,814
49%
Total
221,969
100
Source : Sri Lanka Tea Board

17. SRI LANKA TEA EXPORTS (Mn. KGS) Source : Sri Lanka Customs 2008 2009
2010
2011
2012
2013
Bulk
178.0
164.6
176.8
179.9
130.25
130.09
Packets
84.3
75.5
89.8
95.8
153.8
157.0
Tea Bags
20.3
18.7
25.7
24.6
21.4
24.07
Others
18.6
21.2
1.8
2.9
0.54
1.98
Re-
Exports
10.6
20.5
14.6
8.51
Total
(Mn Kgs)
319.8
290.6
305.7
323.7
320.7
321.65
Value
Billion USD
1.26
1.18
1.37
1.51
1.44
1.55
Source : Sri Lanka Customs

18. Sri Lanka Tea Exports earning

19. Ceylon Tea Exports FOB unit price
Source : Sri Lanka Customs

20. DOMESTIC CONSUMPTION
Year
Qty. (Mn. Kgs) Approx.
2006
27.5
2007
28.0
2008
28.5
2009
2010
28.4
2011
28.9
2012
27.8
2013
Source : ITC Report, London

21. DISTRIBUTION CHANNELS
Type Percentage
Supermarkets %
Grocery retailing %
Convenience stores %
Tea Shops / Tea Houses %
Others %

22. Tea Industry’s Role in Sri Lanka’s Economy
Tea export earnings reached USD 1.55 Billion in 2013 a historical high contributing 15% to the nation’s foreign exchange.
Of the 322 Mn Kgs exported over 55% was in value added form
Tea generates 65% of export agriculture revenue
Tea industry contributes approx. 2% of the island’s GDP
With 2 Million employed directly and indirectly 10% of the population of Sri Lanka depends on the industry.

23. Sri Lankan Tea Industry’s Role in the Global Tea Economy
Sri Lanka remains the world’s largest orthodox tea producer and the world’s largest orthodox tea exporter with 17% market share
2013 production placed Sri Lanka as the 4th largest producer of tea with 9% share of the global tea crop.
As per 2013 export volume Sri Lanka has been able to sustain the position of 3rd largest exporter exporting to more than 150 countries.
Sri Lanka also succeeded in maintaining her position as world’s largest pre-packed tea exporter and the number one in value added earnings (60%)

24. Ethical & Sustainable Practices
Strict adherence of ISO 3720 Minimum quality Standard
across entire supply chain
Ensuring certification on Ethical Tea Partnership, Fair Trade Labeling , Rain Forest Alliance etc.
Clean as ever in pesticide residues
Compatibility with CODEX, FAO, EU & Japanese standards for Maximum Residue Limits
Drive for re planting and in-filling to increase productivity
and reduce cost of production
Support Forest Garden Tea Growers to protect biodiversity & commitment for ecological sensitivity

25. Commitment to Sustainable Business business
PURITY & FOOD SAFETY
ETHICAL
BUSINESS
ENVIRONMENT
SOCIETY
Rainforest Alliance Certification
GLOBAL GAP Certification
Forest Stewardship Council
Agricultural Standards
Beyond the TRI & RRI Guidelines
Committed to CEO Water Mandate
Signatory to the ‘Caring for Climate’
Preservation of Biodiversity
Committed to the Ten
Principles in
Human Rights
Labour Standards
Environment
Anti – corruption
Ethical Tea Partnership
Living Environment
Health & Nutrition
Community Capacity
Building
Empowerment of
Youth
ISO 22000:2005
HACCP

26. OZONE FRIENDLY CEYLON TEA
Accolade from Montreal Protocol in Canada for first ever Ozone Friendly tea in the world.
Sri Lanka tea industry was awarded Ozone friendly status in 2007 for non usage of Methyl Bromide an Ozone depleting substance.
Ozone friendly Ceylon tea supports the reduction of global warming.
Environmentally friendly & ecologically pure tea.
Helps an earth caring community to free the planet from pollution.

27. Unique Selling Points of Ceylon Tea

28. RE-EXPORTS (CEYLON TEA BLENDED WITH OTHER ORIGINS)
Year
Qty (MT)
Value
(Rs. Mn)
(USD Mn)
2007
15,597
6,617
59.80
2008
18,577
10,683
98.61
2009
10,574
5,089
44.27
2010
18,607
11,567
102.30
2011
20,529
13,363
118.30
2012
13,907
11,405
89.46
2013
8,515
8,636
66.89
Source : Sri Lanka Customs

29. Tea Imports to Sri Lanka
Year
Quantity (Kgs)
Value
(Rs. Million )
(USD M.)
2008
14,598,248
3,754.8
34.13 
2009
9,960,129
2,979.4
27.08 
2010
12,172,753
3,768.0
34.25 
2011
11,406,044
3,770.4
34.28 
2012
6,799,026
2,620.96
20.63
2013
5,083,763
1,778.87
13.78
Source : Sri Lanka Customs

30. Tea Imports to Sri Lanka (Kgs)
2010
2011
2012
2013
India
4,776,141
4,353,513
2,114,276
1,523,046
China
2,802,873
2,895,761
3,155,281
2,588,596
Kenya
3,871,167
3,690,453
1,335,224
794,991
Vietnam
352,203
97,909
154,260
68,750
Indonesia
207,068
182,620
29,840
4,000
Malawi
143,104
150,660
69,600
Germany
10,805
23,898
1,775
2,449
Taiwan
7392  -
150
Japan
900
220
U.K
9980
Nepal
1100
1250
Burma
3,430
Korea
14,240
TOTAL
12,172,753
11,406,044
6,799,026
5,083,763
Source : Sri Lanka Customs

31. MAJOR DESTINATIONS FOR CEYLON TEA
2011
Country
Qty. MT %
Russia
47.3
14.8
Iran
30.8
9.6
Syria
28.5
8.9
Iraq
22.2
6.9
UAE
21.5
6.7
Turkey
18.9
5.9
Azerbaijan
11.8
3.7
Japan
11.3
3.5
Kuwait
9.1
2.8
Ukraine
7.8
2.4
2012
Country
Qty. MT %
Russia
46.6
15.2
Iran
38.1
12.4
Syria
24.7
8.0
Iraq
23.4
7.6
Turkey
23.1
7.4
Libya
16.2
5.3
UAE
11.2
3.6
Azerbaijan
10.6
3.5
Japan
9.5
3.4
Jordan
9.3
3.0
2013
Country
Qty. MT %
Russia
45.6
14.2
Iran
38.4
11.9
Turkey
32.2
10.0
Iraq
22.2
6.9
Syria
21.0
6.5
UAE
17.5
5.4
Kuwait
16.0
4.9
Azerbaijan
10.8
3.3
Japan
8.8
2.7
Jordan
7.6
2.4
M.K
Source : Sri Lanka Customs

32. Issues Facing Sri Lankan Tea Industry
Exported to over 150 countries: No uniformity in standards applied by importing countries
Lack of knowledge of consumer countries about good quality tea
Low quality teas exploiting Ceylon Tea name
Price War: undercutting
Climate change Consequences – Extreme weather Dependent – EL NINO/LA NINA Phenomena play havoc

33. THANK YOU. Sri Lanka Tea Board E-mail: promotion@pureceylontea. com a
THANK YOU. Sri Lanka Tea Board a.com