The Hindu Business Line : Global slowdown to impact Lanka’s $2 b tea export target

COLOMBO: Global slowdown can put a spanner in Sri Lanka’s ambitious target of achieving $2 billion tea exports by 2010 with the country’s foreign minister urging “friendly'' tea importing nations to continue buying more tea from the island nation.

After meeting the mission and envoy head of Egypt, Iran, Russia, Saudi Arabia, Iraq, Kuwait and Qatar late last week, Foreign Minister Rohitha Bogollagama had said, “Sri Lanka is seeking the support of friendly countries who are principal buyers of Ceylo n tea, to remain active in the tea market, in order to promote tea exports from Sri Lanka and to maintain price stability''.

Further the minister stated that most of the major markets for Ceylon tea are under private sector that plays a dominant role in determining prices influenced by market forces of demand and supply. However, he observed that governments could still play a complementary role in facilitating the activities of the private tea companies in the market to ensure a sustained demand for Sri Lankan tea. He outlined the remedial measures taken by the Government of Sri Lanka in maintaining stable tea prices at the Colombo auctions, including the activation of a Tea Stabilization Fund, a 6 per cent interest subsidy on bank loans for members of the tea trade, as well as the intervention of the Sri Lanka Tea Board at the Colombo tea auction.

He also underscored the importance of the tea industry to the Sri Lankan economy, noting that this billion dollar industry accounts for more than two-thirds of the country's agricultural export earnings, contributing about 4 per cent to the GDP. - PTI

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