Sri Lankan tea players to benefit from world’s aging population: report

27 May 2014 04:38 am Views - 9708

Sri Lanka’s tea sector players are likely to benefit from the new demand coming from the ageing population in the global market place, particularly from countries such as Japan, Europe and the US, according to a recent study by the Business and Information Division of the Ceylon Chamber of Commerce.

The study, which analysed the performance of t he global tea sector in 2012 and 2013, had shown that the increasing level of awareness among consumers of the health benefits of tea and the beverage’s anti-ageing properties have helped in the latest shift in demand for tea.

“The demand for tea, which is t he world’s most consumed beverage, is growing with consumers shifting from carbonated drinks to healthy beverages, providing an opportunity to the global tea sector players such as Sri Lanka,” the study noted.

During the year 2013, over 290 billion litres of tea had been sold in retail and food service, with t he retail value amounting to US $ 40.7 billion.

However, despite the huge promise the commodity has, the report identified that tea still lacks the high value found in competing beverage markets.

“These point out a key opportunity for tea manufacturers and retailers, as the volume continues to grow and the value begins to catch up through premiumisation and changing habits, there is a huge amount of long-term growth available for the taking and an incredible opportunity for those who understand the evolving market,” the report added.

Sri Lanka’s tea exports in 2013 hit the highest-ever earnings figure, recording an income of US $ 1.54 billion, reflecting a 21.5 percent increase over the previous year.

However, major tea plantation companies in Sri Lanka have been complaining about the higher cost of production and adverse weather conditions.

In Sri Lanka, the wages of the plantation workers are negotiated every two years, though the wages do not have a direct link to their productivity.

“The current market gains despite their significant improvement are still well below cost of production. Increased productivity during the year 2014 would be crucial to overcome the present constraints,” Chairman of Madulsima Plantations, which predominantly grows tea, Harry Jayawardena told the shareholders in the firm’s latest annual report.