Financial Times

Ceylon tea industry aims at huge Chinese market

The Ceylon tea industry is making a new thrust to increase exports of black tea to China, now dominated by green tea, through the new Ceylon Tea Promotion Unit attached to the Embassy of Sri Lanka in Tokyo, Japan.

China is considered a huge market for black tea in the future with its high economic growth leading to an expanding middle class with more buying power and a desire for imported products, an embassy statement said.

China is the world's largest producer and consumer of Green tea, Oolong tea and Jasmine tea with a total production of all teas reaching 750 million kilos by 2003 and domestic consumption 475 million kilos.

But China's black tea production is only 50 million kg a year, or six percent of total produce, and its local consumption around 20 million kilos a year.

Sri Lanka exported less than 200,000 kg of black tea accounting for only a 10 percent market share in China, which imports around two million kg a year.

However, the actual volumes of Ceylon black tea reaching mainland China through Hong Kong, Taiwan and Macau should be much bigger.

The embassy said it was trying to get the World Trade Organisation to request China to lift non-tariff barriers on black tea imports.

As part of its efforts to penetrate the Chinese market, the Tea Board Office in Tokyo took part in the SIAL CHINA FAIR in Shanghai along with eight tea exporting companies.

The embassy's Ceylon Tea Promotion Unit, responsible for propaganda work in East Asia, Far East and Oceania, launched its advertising and promotional programme at FOODEX 2004 in Tokyo, Japan, along with 12 tea exporting companies.

It is also trying to expand the market for Ceylon teas in South Korea and took part in SEOUL FOOD 2004 fair with four exporting firms.

Sri Lanka is the largest exporter to S. Korea, supplying around two million kg of mainly black tea.

The total S. Korean market is around 20 million kg of which 15-16 million kg of green tea is produced by S. Korea itself and only four million kg imported.

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