The challenges faced by the Tea industry are envisaged to worsen during 2022 due to the rapidly changing macro-economic landscape, says Veteran Tea Taster, Merrill J. Fernand0.
In his capacity as the Chairman of Kahawatte Plantations, Fernando said that the Sri Lanka’s Tea industry faces longer term challenges arising from climate change, and increasing price competition in the global tea category.
The potential for quality tea is undisputed although more strategic direction, and promotion of Ceylon Tea to secure the image of Sri Lankan Tea amongst younger consumers who now dominate the tea category, as well as access to affordable funding for soil rehabilitation, replanting, social and environmental sustainability as well as innovation in the industry are critical requirements, he said.
Continuing dependence on traditional markets, traditional agricultural methods and the reputation of Ceylon Tea amongst an ageing generation, do not bode well for the future of Ceylon Tea, he said.
He said that the declining land productivity, over-reliance on a steadily diminishing work force and absence of a broad based national initiative for mechanisation and automation as a counter strategy continues unaddressed.
Regular wage increases without any link to productivity improvements, and the absence of a national policy, for the development of the sector which provides a livelihood for over 10-15 per cent of the country’s population, adds to the deterioration of the sector, he said.
The depreciation of the rupee should convert positively to a higher level of tea auction prices in the medium-term in spite of the sharp increase in freight rates and other input costs, he said.
Sri Lanka is yet to see a concerted effort by most exporters to add value to Sri Lankan tea at source, he said
Adherence to an out dated business model creates vulnerability connected with servitude to foreign brands which are driven solely by profit and it therefore forces Sri Lankan exporters into a spiral of declining prices, compromising social, environmental and commercial aspects of the Ceylon Tea industry, he said.
The opportunity for change has never been greater with heightened appreciation of health and wellness in tea, also in the provenance and purity of traditional, orthodox tea, he said.
Sri Lanka has the opportunity to connect with this trend that is being fuelled by younger, more adventurous consumers although that demands a more proactive approach by industry, overseeing and facilitating agencies, he said.
By Mario Andree