The overseas demand for low grown-type manufacture against high grown type Sri Lankan teas has sharply increased in recent months fuelled by rising incomes from West Asian buyers from high oil prices.

The demand for the orthodox leaf tea is growing in the world market and thus prices too are going up. A kilo of tea that fetched Rs 347.87 per kilo in January fetched Rs 361.98 per kilo in May and correspondingly high grown tea that fetched Rs 316.88 per kilo in January has dropped to Rs 253.23 per kilo in May, tea trade sources said.

With low growns fetching higher prices, high grown sector factories involved in producing CTC type are now shifting to orthodox leaf tea manufacture and in the case of regional plantation companies, they have their own cluster of estates in geographical locations which are creating capacity to have orthodox or CTC manufacture.

The sources said these factories have the flexibility to move from the manufacture of one kind of tea to another to take advantage of the market conditions that prevail at the time. Anil Cooke, CEO, Siyaka said that not only the oil rich countries -- Saudi Arabia, Iran, Kuwait, Iraq, Syria, Jordan, Lebanon, Tunisia and UAE -- are going for leaf tea but also Russia and the Commonwealth of Independent Nations prefer orthodox tea.Out of the national tea production 54 percent is low grown tea and primarily it is orthodox leaf tea and mid-country tea is 19 percent and at least half of it is orthodox leaf tea. High grown is around 27 percent and out of which may be 5 to 10 percent is leaf tea. The balance high grown tea is CTC manufacture. For that too there is a loyal market.

Mr Cooke said that Sri Lankan tea manufacturers are very competitive and responsive A government official connected to tea industry who wished to be anonymous, told The Sunday Times FT that all the West Asian countries preferred orthodox leaf tea but European and African countries preferred CTC.
He said that around 20 years ago Sri Lanka's entire tea production was orthodox leaf tea production, but around 15 years ago there was a government directive to convert orthodox tea into CTC in the hope of capturing the huge Pakistan market. But around six years ago this trend has reversed and now its back to more orthodox leaf tea to cater to the growing market for this kind of tea.

Even though there are price disparities between low grown and high grown and between orthodox leaf tea and CTC, industry sources said the tea sector is well poised to absorb the favourable global market trends. According to them, the industry is amenable to change the processes with the aim of getting the highest possible increase in price. The entire process that is taking place now is a great impetus for the development of the tea industry as a whole. .