TEA hosts interactive evening for exporters and parliamentarians

An interactive evening of the Tea Exporters’ Association (TEA) was held in early April at the Sovereign, Rajagiriya, amidst a large gathering of tea exporters and a few parliamentarians. This event was sponsored by the Sri Lanka Export Credit Insurance Corporation (SLECIC).

IMF Resident Representative Dr. Koshy Mathai was the Keynote Speaker. Deputy Speaker Chandima Weerakkody and Deputy Minister of Investment Promotion Faiszer Mustapha along with MPs Ravi Karunanayake, Dr. Harsha de Silva, Sujeewa Senasinghe and Arjuna Ranatunga were present.

TEA Chairman Rohan Fernando welcoming the invitees and fellow members of the association stated that this was the first interactive session designed to establish a close rapport between the tea export companies and the law makers of the country.

He pointed out that there were two main segments in the tea industry – the plantation industry and the export sector. Until now parliamentarians considered these two segments as one and addressed all issues with regard to them purely from a plantation perspective.

He emphasised that the tea exporters appreciated the enormous amount of work undertaken by the tea plantation companies in attending to the development of infrastructure and the basic services to the huge labour force. He however lamented that the hardships silently endured by the exporters were mostly overlooked by the decision makers.

Although the membership of TEA, most of whom are present in the audience, together account for over 85% of the country’s tea export volume and revenue, he stated that the members were of the view that their opinions were not considered when policy decisions were made, the recent attempt to increase the tea export cess being a case in point.

He further expressed that a document on the strategy to increase the value of tea exports from US$ 1.5 billion to US$ 5 billion by 2020, through the setting up of a tea hub, had been presented but not taken on board seriously. He concluded by stating that the TEA’s interactive initiative would hopefully help the decision makers understand the predicament faced by the tea exporters and further pave the way for a continued dialogue between exporters and parliamentarians.

Dr. Mathai, delivering his thoughts on the current economic and business environment, stated that to strengthen the country’s economy, the tax collection needs to be upped. The Government must also bring down the trade deficit and enhance the GDP growth from the current 6%. He also stated that more private investment was required to speed up projects.

He noted that the banking sector though developed had room to grow on long term finance. He however opined that the shrinking exports relative to global exports were among country’s immediate concerns. Dr Mathai added that in the last two years there were problems in the global economy, some of which still continue.

He stated that the Sri Lankan Rupee which had been overvalued was corrected last year, bringing about a flexible exchange rate in order to avoid the need of losses in exports. He noted that the exchange rate flexibility was an excellent move. Although it leads to general difficulties in operating import businesses, the theory is “if you help the export sector, it will help your import sector too”.

He further stated that although the Western economy was growing in a slow manner, the Eastern economy was growing fast. However, he noted that Sri Lankan exports to these destinations were much smaller than to the West.

He added that as Sri Lankan export earnings did not show any change to previous years, more value addition was needed. In this context, he advocated that deliberations on the tea hub should continue as businessmen must have price differentiation options. He was however advised that there could be downsides as some overseas buyers may doubt the quality of pure Ceylon Tea exports. He concluded by stating that tea was a key industry in exports.

SLECIC Chairman D.P. Mendis, speaking soon after Fernando, highlighted the vast support extended by his organisation to the tea trade of Sri Lanka. After providing a brief history of the corporation, he added that it now boasted 24 different insurance products entirely to assist the export sector.

The association’s Secretary-General Niraj de Mel delivering the vote of thanks expressed the association’s gratitude to SLECIC for sponsoring the event. He went on to thank the parliamentarians for their presence, which gave an opportunity to the tea exporters to apprise them of the current status on tea exports and rapidly changing consumer behaviour patterns. De Mel thanked Dr. Mathai for enlightening the membership of the current economic situation facing Sri Lanka and what needed to be done.

A lively interaction among the participants followed thereafter with dinner.