Sri Lanka secures direct access to fifth largest global buyer of Pure Ceylon Tea

Sri Lanka has succeeded in becoming a direct tea supplier to Iraq, in addition to be the dominant tea supplier in the country, the fifth largest buyer of Pure Ceylon Tea in the world.

“I have been given to understand that our direct shipments of Pure Ceylon Tea to Iraq have, in terms of value, increased by 66% in 2011 to $ 68.6 m from 2010’s $ 41.3 m. Also, in terms of volume, there have been 22,624 MT in 2011, rising from 13,052 MT in 2010. This huge growth shows our tea transhipment levels are falling, giving us the benefit of becoming the direct supplier in addition to being the dominant supplier for Iraq’s $ 170 m annual tea import market,” said Minister of Industry and Commerce Rishad Bathiudeen yesterday.

Minister Bathiudeen revealed this in the aftermath of yesterday’s high level discussions he held with top ranking officials from several Government ministries, boards and chambers at the preparatory meeting for the forthcoming eighth session of the Iraq-Sri Lanka Joint Committee for Economic and Technical Cooperation (ISLJECT).

The eighth session of ISLJECT is to be held in Baghdad, Iraq, in October this year. Reps from the Department of Commerce and the EDB under Minister Bathiudeen, the Ministries of Finance, Higher Education, Economic Development, Labour and Labour Relations, as well as Justice along with the Sri Lanka Tea Board, Bank of Ceylon, Sri Lanka Ports Authority and Chamber of Commerce, among others, were in attendance at the 30 July review session.

“This is a highly welcome development in our Middle Eastern market penetration efforts and this is important not only about our tea, but overall penetration levels,” Minister Bathiudeen added.

He was informed by the representatives from the Tea Board that due to some technicalities of the Iraqi banking system, the Iraqi market was buying Pure Ceylon Tea via Jordan, UAE/Dubai or Kuwait, rather than directly purchasing from Sri Lanka.

During yesterday’s session, Tea Board representatives informed Minister Bathiudeen that the Government’s decision to remove tea from the list of rationed items in mid-2010 paved the way for the private sector to fully engage in the Iraqi tea business. While a 76% increase is seen in terms of volume, in terms of value, the direct tea shipments have jumped by 66% in 2011 to $ 68.6 m from 2010’s $ 41.3 m.

Iraq was the fifth largest buyer of Pure Ceylon Tea in the world and the fourth largest Pure Ceylon Tea buyer in the Middles East (the world’s leading Pure Ceylon Tea buyer being the Russian Federation and the Middle East’s leading buyer being Iran).

Previously, on 21 June, Iraqi Ambassador to Sri Lanka Kahtan Taha Khalaf, during a courtesy call on Minister Bathiudeen, revealed that Iraq “really likes Pure Ceylon Tea”.

“Apart from Pure Ceylon Tea, we now want Sri Lankan apparels and raw rubber, none of which are being produced in Iraq,” the Ambassador added.

The seventh Session of the Sri Lanka-Iraq Joint Committee for Economic and Technical Cooperation was held in October 2010 in Colombo and concluded successfully with the establishment of committees to study various areas of cooperation.

Three committees were set up to study cooperation in trade and finance, economic and scientific, and cultural and technical fields. The high-level Iraqi delegation was led by Dr. Safa Al-Deen Mohammed Abdul Hakeem Al-Safi (Minister of Trade of the Republic of Iraq) while the Sri Lankan delegation was led by Minister Bathiudeen.

Bilateral trade between the two countries which stood at $ 8.76 m in 2003 had reached $ 37.5 m in 2009 with 98% of it being tea exports to Iraq. Sri Lanka was the major supplier of tea to Iraq with 65% of the total annual intake of our tea by Iraq until 1990. Currently, more than 90% of Sri Lanka exports to Iraq consist of tea.