Sri Lankan tea to travel on rail and cut costs, says trade
Amidst a growing global crisis in tea sales, the Colombo Tea Traders Association (CTTA) has proposed the re-introduction of the use of rail transportation and auction automation for an industry that would turn 150 years in 2017.
CTTA Chairman Anselm Perera addressing the 121st AGM of the association in Colombo last week said the auction prices were seriously impacted due to the devaluation of the Russian Rouble by 70 per cent and by end March this year prices fell well below those of 2013. Other key tea markets like Iran, Iraq, Syria and Libya were all in conflict, it was noted.
In this respect, he explained, Sri Lanka had seen a progressive decline in auction prices since the third quarter of last year.
Mr. Perera noted this year to be “one of the most trying periods the industry has ever experienced” with auction prices around Rs.60 to Rs.80 below the cost of production causing financial turmoil.
However, he expected the present crisis to be “short lived” and believed the industry would be able to turnaround.In the wake of these crises he explained that producers needed to fine tune and improve manufacture so as to enhance the quality of the end product, which would attract better prices, while eliminating the production of teas at the bottom end, which only serve to depress prices.
The Chairman however remained sceptical of the guaranteed payment of Rs. 80 per kg of tea leaf to smallholders cultivating on lands less than 10 acres, which he believed could lead to production of poor leaf and consequently inferior manufactured tea fostering corrupt practices.
He was also critical of the accumulation of over Rs. 5 billion into the coffers as levy charged from exporters for promotion and marketing that was had taken an “unduly long lapse in implementing the global promotion programme.”He said the CTTA contributes US$1.6 billion to the national income.
Mr. Perera proposed for the revisiting of the automation of the Colombo Tea Auction with a committee already appointed to study the development of an integrated computer system. Previous attempts in this regard were held back due to lack of funds, he noted.
He also requested for the return to the use of the railway system as a mode of transportation aimed at reducing congestion on the roads and cutting down on the travel time. With producers supplying seven million kg of tea each week from the plantations to Colombo for the auctions, it amounts to 1, 200 truck loads per week, Mr. Perera explained.
He noted that it was mismanagement and corruption in the railway system that compelled authorities to abandon the use of it to transport tea and this needs to be revived with the re-laying of rail tracks removed from Avissawella to Opanayaka and beyond into Sabaragamuwa and the south and upgrading of the Matara rail line as well. It was pointed out that if this was implemented effectively, 60,000 truck loads would be removed from the highways each year.
In addition, with Ceylon Tea marking 150 years in 2017 the industry is gearing up to hold an exhibition and an international convention together with other appropriate celebrations to commemorate this event.Chief Guest at the AGM, political scientist Dayan Jayatilleke addressing the members stated that Sri Lanka needs to tap on the rise of Asia by joining the China-led Asian Investment and Infrastructure Bank (AIIB) and avoid complete rejection and isolation.
He believed that the tea industry was a microcosm for the Sri Lankan situation and provides an illustration of its external relations. Dr. Jayatilleke pointed out that the upcoming international inquiry into the last stages of the war was more crucial than the current crisis the tea industry was facing.In the face of these challenges Sri Lankan needs to take up successful diplomacy to come out of the current problems that it has placed itself in.