Policies and Norms of Sri Lanka for Tea Industry for Import/Export Including Licensing, Permission & Taxation

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  • Topic: Tea, Sri Lanka, Tea production in Sri Lanka
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  • Published : April 27, 2012
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POLICIES AND NORMS OF SRI LANKA FOR TEA INDUSTRY FOR IMPORT/EXPORT INCLUDING LICENSING, PERMISSION & TAXATION

The tea sector in Sri Lanka has always been an important component of her economy. It is also the country's largest employer providing employment both, directly and indirectly to over one million people. It also contributes a significant amount to Government revenue as well as to the gross domestic product.

Sri Lanka as the 3rd biggest tea producing country generating US$673 million in 2000. It also contributes to political, economic, and social stability by providing a livelihood for many of Sri Lanka’s rural dwellers, especially women. Sri Lanka has 9% production share in the international sphere, and one of the world's leading exporters with a share of around 19% of the global demand. The total extent of land under tea cultivation has been assessed at 187,309 hectares approximately.

Shipping roughly 21% of international trade in tea, Sri Lanka is the world’s largest exporter. Since the mid-1990s, it has received higher price than other origins and adds more value between the auction and the port than other tea-producing nations.1 Its main product is orthodox tea, 90 to 92 percent of which is exported. 90% of exports are in packet form for eventual consumption as loose tea, or in bulk shipments, most of which is further processed, blended, or packaged offshore.

Sri Lanka produces tea throughout the year and the growing areas are mainly concentrated in the central highlands as well as southern areas of the island. They are broadly grouped under these headings according to their elevations, with high grown ranging from 1200 m upwards, medium grown covering between 600 m to 1200 m. and low grown from sea level up to 600 m.

High grown teas from Sri Lanka are reputed for their taste and aroma.

The medium grown teas provide a thick coloury variety, which is popular in Australia, Europe, Japan and North America.

The teas produced in low grown areas are mainly popular in Western Asia, middle Eastern countries and CIS countries.

A COMPETITIVENESS STRATEGY FOR SRI LANKA’S TEA INDUSTRY

✓ Position the Industry Closer to the Consumer

✓ Forge Alliances with National Marketers of -rich Blends

✓ Launch a Rediscovery

✓ Develop the Workforce for an industry

✓ Restructure the Public–Private Partnership

The first initiative will capture value through branding, the second will use alliances to boost demand for Ceylon-rich teas in target markets, and the third will market Ceylon-rich blends directly to end-consumers through teahouses while building a market image for the teas.

These three initiatives will require consumer research, market development, efficient logistics, and streamlined import and export procedures. To support these needs, the fourth initiative will promote the improvement of managerial, marketing, quality control, logistics, and other technical skills, and the fifth initiative will seek to streamline activities from the estate to the shipping point and increase private sector responsibility for research and promotion.

These initiatives are important in strengthening the long-run competitive position of the tea industry. They will create additional value for customers in target markets, increase industry sales and profitability, and make growers, employees, and stakeholders less vulnerable to price volatility.

In arriving at this strategy, the Tea Cluster has operated as an industry forum pursuing the best interests of the industry and has reached consensus on many issues. Two issues remain unresolved—the import of orthodox teas from other origins and privatization of the monitoring of teas before export. Reaching agreement on the import issue is a specified goal. The privatization of monitoring is still being debated.

(S.W.O.T) STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS

Strengths:

• Sri...
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