Sri Lanka value-added tea exports fall

Oct 04, 2011 (LBO) - Sri Lanka's value-added tea exports have fallen in recent months in what a tea broker described as a "disturbing trend" as the country is trying to coax its main export up the value chain. Tea bags rose to a "healthy" nine percent in the quarter from six percent a year ago, the brokers said.

In June 2010 Sri Lanka Customs' definition of a tea packet was changed from three kilos to include packages up to 10 kilos.

Since July, however, exports in bulk form as a percentage of total shipped in each month has risen, Asia Siyaka Commodities said.

"Correspondingly, teas in packets and tea bag exports have been declining.

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In August bulk tea comprised 43 percent of exports, packets 47 percent and tea bags eight percent.

Tea exports have been affected in recent months owing to unrest in the Middle East, a big market for Sri Lankan tea.

The government has been trying to encourage more exports of value-added teas and has discouraged bulk exports by imposing a tax on the latter.

Sri Lanka has also been lobbying countries like Russia, its biggest market, which has imposed higher taxes on value-added tea imports.

Asia Siyaka Commodities said a review of latest ex