Changing fortunes of Ceylon Tea through GI certification

Ceylon Tea – once the prime breadwinner of the economy – is set to enter a new era, as the largest agricultural export commodity of the country is equipped to obtain the Geographical Indication (GI) certification from the European Union (EU) in the near future. The impending certification is the result of hard work during the period of last four years, which was funded by the French Agency for Development (AFD) and French Agricultural Research Centre for International Development (CIRAD) with financial assistance of Euro 1.1 million.

Ceylon Cinnamon became the first Sri Lankan commodity to gain GI certification from the EU in 2022. The initiative to obtain the island’s first GI certification was led by the EDB with the collaboration of many public and private stakeholders. GIs are signs used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. 

Ceylon Tea has been synonymous with the South Asian island for more than a century. The beverage has played a crucial role in the socio-economic evolution of Sri Lanka ever since it was introduced into this fertile land by the Scottish planter James Taylor back in 1867. Unfortunately, the brew has been in decline over the past few decades due to a combination of structural, economic, and global market challenges. Kenya, India, Vietnam, and China have overtaken Sri Lanka in terms of volume and price competitiveness while multinational brands often buy Ceylon Tea in bulk and rebrand it diluting the value of its identity. The industry’s plight has been further undermined by the political and economic instability of Ceylon Tea’s traditional export markets in the recent past – Russia, Ukraine, Iran, Iraq, Turkey, Syria and many states in the Middle East. Economic sanctions imposed by the West on Russia and Iran have created snags to suppliers with regard to payments from buyers. Serious question marks are hanging over its long-term sustainability owing to the cost and availability of labour as well.

Today, global consumers increasingly demand sustainably grown and ethically sourced tea. The industry as a whole would have a brighter future by increasing its focus on supplying ethically sourced tea to the international market. To move forward in that direction, the exporting companies need to secure international certifications like Rainforest Alliance and Fairtrade that guarantee ethic-conscious consumers in the West that tea they drink is produced by meeting the top standards of environmental, social, and economic sustainability. Such a strategic focus would be helpful in terms of gaining acceptability in conflict-free markets like Australia and Britain.

Hopefully, GI certification would enable Ceylon Tea to achieve increased market differentiation, higher product turnover and gain premium prices from consumers which would in turn raise the income of value chain participants. Exporters have repeatedly pointed out that though consumers in the West insist strict adherence to high standards of sustainability as well as safe and decent working conditions, they are unwilling to pay higher prices. Obtaining GI would enable Ceylon Tea to be positioned as a premium product with resultant higher prices. Such increased financial benefits need to be shared throughout the value chain by the companies to raise the living standards of estate communities.

Positioning agricultural products as premium and up-market choices in the global market would also enable the country to increase its export income in alignment with the Government’s vision of increasing the export revenue to $ 36 billion by 2030.