Following a scarcity of raw materials for green tea leaves, 90% of Sri Lankan tea manufacturers are reported to be operating under capacity in a fiercely competitive market, The Morning Business learns.
Speaking to The Morning Business, Sri Lanka Tea Factory Owners’ Association (SLTFOA) Immediate Past Chairman Harith Ranasinghe revealed that there has been an increase in the great scarcity of raw materials in the tea manufacturing market.
“For the last 10 years, there has been an excess demand (for tea) and scarce tea suppliers. The productivity of our suppliers is also decreasing. Many suppliers have also left the market or shifted to other markets,” Ranasinghe revealed.
The Association also revealed that this scarcity has influenced tea manufacturers to purchase raw materials for green tea leaves, which also contain faulty green leaves known as refused tea or tea wastage that are excluded from the manufacturing process.
“We remove more than 10%, which is refused tea or tea waste. When the leaf standard is poor, the waste is more. We are selling in Colombo Auctions. We apply the International Standard Organisation (ISO) standard to maintain a certain level of quality and abide by other regulations. Therefore, we cannot manufacture low-quality leaves,” he commented.
Ranasinghe further revealed that the wastage is below 5% when tea manufacturers receive good-quality raw materials for green tea leaves. In addition to this, it was also added that low-quality – or refused – tea consists of a hard texture accompanied by a shade of brown.
“We are operating on a price share basis given by the Tea Commissioner, and we have to abide by it. We are receiving the raw materials, and manufacturing and selling the products. We share our profits – 32% to us and 68% to suppliers. Out of the 32%, the total wastage to tea manufacturers is 28%,” Ranasinghe explained.
Furthermore, the Association revealed that more than 18% of the daily limited supply of raw materials that the tea manufacturers receive is damaged during transportation, as there is a limited number of persons involved in the process.
“There are three ways of getting raw materials. First is to directly obtain from the smallholders, second is for smallholders to deliver them to you, and the last is for a third-party intermediary to deliver supplies from smallholder farmers to manufacturers. These intermediaries are the people who have done the most harm,” Ranasinghe alleged.
In addition, the cause for the damage of the raw materials lies where intermediate parties pack green tea leaves incorrectly, resulting in damaging the tender high-quality raw materials. The Association also highlighted that the rules that are given to intermediate parties are not followed carefully, resulting in this cause as another contributor to the scarcity in the market.
Moreover, raw materials will no longer remain fresh if they are not delivered to tea manufacturers within three hours.
Therefore, as a measure taken by tea manufacturers to preserve and obtain as many raw materials as possible, tea manufacturers encourage tea pluckers to pluck tender leaves and maintain the process regularly, along with asking tea suppliers to supply good-quality raw materials.
The Association lastly added that the authorities should encourage replanting tea as it would increase the supply capacity and that smallholder farmers (tea pluckers) should be trained well and supported to increase productivity and thereby supply.
Tea manufacturers run under capacity
02 Mar 2021
Tea manufacturers run under capacity
02 Mar 2021