Japan “drops” buying Ceylon Tea
Sri Lanka is fast losing one of its key buyers; Japan that has dropped purchases by nearly half for this Dimbula season. This comes in the backdrop of a US$52 million loss in earnings the industry made in the first quarter.
Japan is a key buyer of teas during the peak Dimbula season but this year buying has dropped by 42 per cent.
Japan which last year bought 1.5 million kg of Ceylon Tea during the January to March season purchased only 872,000 kg this year.
Asia Siyaka Brokers CEO Anil Cooke explained that this development was due to a combination of circumstances one of which is that one of their important suppliers is not confident of doing business with Sri Lanka under the prevailing situation in the country.
“They don’t know if we will have fertiliser and even if we do there will be a quality drop and whether there could be a quantity drop as well,” he noted.
As a result these buyers will shift elsewhere and gradually change their standards in purchasing teas of other origins. Once Japan gets used to purchasing teas of other origins it will be difficult to change back to this taste again.
This is not the first time Sri Lanka lost a share of the Japanese market for tea as it faced a similar situation in 2018 when glyphosate was banned due to the short-sightedness of leaders like former President Maithripala Sirisena.
Sri Lanka saw a direct hit to its income in the first three months of this year as the tea industry faced a $52 million loss of value mainly driven by the lack of fertiliser, which experts in the sector note they always predicted would eventually happen. Last year the earnings in the first quarter stood at $338 million which declined to $286 million this year.
“Local buyers of Ceylon tea are beginning to give up on us and are shifting to other origins,” a broker noted. In the two previous years’ exports in
Sri Lanka saw a direct hit to its income in the first three months of this year as the tea industry faced a $52 million loss of value mainly driven by the lack of fertiliser, which experts in the sector note they always predicted would eventually happen. Last year the earnings in the first quarter stood at $338 million which declined to $286 million this year.
the first quarter to Japan were 1.5 million kg and 1.4 million kg
Planters Association Spokesman Dr. Roshan Rajadurai said Japan is a key market and when Japanese customers are not at the auction “it will have a significant and long term impact.” Japan pays a high value for a premium product, he noted.
He asserted that as experts in the industry they had consistently tried to impress upon the leadership that they should allow the professionals to manage the industry.
However, all of these had fallen on deaf ears and today the industry and the country is facing the consequences with a loss of earnings in dollars which is the much needed revenue at this juncture that could have been used to carry out imports of essentials.
As a result India is fast picking up on our buyers and “we are losing market share,” he lamented as the industry watches on helplessly.
“More worrisome is the difficulties the industry is today facing in maintaining their local operations in the face of a continuous lack of energy, unaffordability of fertiliser, unavailability of weedicides and high costs,” he noted.