•    Tea Board optimistic of ME markets as recession effects spillover to the West
•     Despite hurdles, SL continues exports to Ukraine

 Despite the looming global recession, the Sri Lanka Tea Board anticipates that the demand of the Middle Eastern market for Ceylon tea would remain unaffected unlike most European market countries, The Daily Morning Business learns.

Speaking to The Daily Morning Business, Sri Lanka Tea Board Chairman Niraj de Mel stated: “With tea being a much-sought-after beverage in most of the Asian region, they (tea products) are also strongly in demand in the Middle Eastern region. I don’t think the recession has affected the demand for tea in those countries as much, compared to the West.”

While admitting that the tea revenue would be affected by the global recession, he said, however, that Middle Eastern consumers would even settle for tea when unable to have a proper meal.

“We (the Tea Board) have observed a similar situation during wars, civil wars, and other various setbacks. We have even seen it in Ukraine.”

In addition, he said despite forecasts that Sri Lanka would experience a permanent market closure for Ukraine in supplying Ceylon tea, Sri Lanka was able to export the products following a hiatus of a couple of months.

He noted that even though the said country consumes 4-5% of the total tea exports, it has been a “useful market” in terms of revenue.

While tea is transported to its destinations through various channels, the payable amount is reduced as a result of each party keeping a margin of the proceeds for themselves. 

 Expressing concern about the recession in European countries, de Mel stressed that despite it affecting Sri Lanka, he has faith that Ceylon tea exports would be able to survive.

When encountering tea market disruptions globally, the Government of Sri Lanka is expected to contribute with minor efforts, since the market has been dominated by the private sector on a major scale for decades, even when building trade connections with buyers. Thus, the Government will offer incentives to exporters as a measure of generating foreign exchange or during price setbacks, with the option of buying tea at a tea auction set to take place soon.   

Also, following the Sri Lankan rupee (LKR) strengthening, the export revenue is to be subjected to a reduction. “It is expected that the tea market will largely come down with the rupee strengthening,” the Tea Board Chair stressed.