Pakistan pledges to buy more tea from Sri Lanka

Pakistan pledges to buy more tea from Sri Lanka
But no indication of enhanced volumes so far
April 15, 2016, 5:28 pm


by Steve A. Morrell

Pakistan High Commissioner, Maj Gen (R) Syed Shakeel Hussain said that stemming from bilateral talks with the Sri Lankan government, his country would increase the import of Ceylon Tea from 1.5% to an appreciable quantity of about 6%.

This was an initial step that could herald increased imports of Ceylon tea to Pakistan, he told a news conference in Colombo recently.

There was, however, no immediate indication in terms of statistics that tea exports from Sri Lanka to Pakistan have increased with the pledge given by the envoy.

According to the market report of Asia Siyaka Tea Brokers last week, Kenya continues to be Pakistan’s major supplier of tea. It should also be on record, that before Pakistan supported Kenyan teas, Sri Lanka was its major supplier.

Kenyan Cut–Twist and Curl, (CTC), eventually scored over Sri Lanka’s Ceylon Tea. At present, Kenya’s exports to Pakistan is now about 28% and the country continues to dominate the Pakistan tea market.Referring to Kenya’s dominance of tea to Pakistan, a brokering source said complaints were that they could not afford to drink Ceylon Tea because of its high auction price. Further, the Pakistan palate was now amenable to the Kenyan taste and it was not quite convenient to change such beverage habits.

Agreements, although in place, did not percolate to the retail trade. The suggestion was that the Sri Lanka Tea Board adopts an intensive marketing strategy improve trade possibilities to Pakistan, and other countries where Ceylon Tea would be accepted.

Egypt too which was in the top bracket for imports has not supported Ceylon Tea since its regular withdrawal from the Colombo auctions. Irrespective of their change in market acceptance of the Ceylon Tea beverage, Egypt also continues to purchase Kenyan tea and its intake now is about 18%

Ceylon Tea to Pakistan continues to languish at its low level of 1.60%, with hardly any improvement in sight. Pakistan buyer’ agents in Colombo confirmed that Ceylon Tea was still too expensive for the Pakistan retail market.

However, in the local tea context last week the auctions recorded a plus variance for Western High Growns at Rs. 422.62 – Rs. 18.08 above last year’s performance.

Could this be the silver lining we were looking for? Brokers collective reply was "don’t place your hopes too high". The quantity auctioned last week was barely 0.9 million kilos. The drop in crop was significant because of the drought affecting most planting district.

Officials remained tight lipped on improvement in market conditions. "We are still not out of the woods", they said.

Exploring new markets too has not had positive responses, they said.