Issue link: http://read.dmtmag.com/i/556538
52 STiR tea & coffee industry international / Issue 4, 2015 (August/September) A The Cost of Sustainable Tea Sri Lanka employs a million workers earning a living wage producing the world's cleanest tea. As a result buyers pay higher prices at the Colombo Tea Auction than the glob- al average — which may just be the cost of sustainable tea. By Anne-Marie Hardie "Higher prices have been sustained thus far but could be at risk if a concerted effort if not made to rebuild the premium, aspirational position of Ceylon tea, highlighting its superiority to other origins." - Premala Srikantha, director (promotion) Sri Lanka Tea Board s Sri Lanka reached its peak cost of tea production Ceylon's fabled or- thodox teas earned a top price of $US3.81 per kilo in 2013. Unfortu- nately these higher prices were not sustained. By November 2014 the price per kilo dropped to $3.35 and by March 2015 the all-elevation average was $3.23 (SLRs 420.21) compared to the average $3.66 per kilo paid in 2014. The Colombo Tea Auction performed better than all other auction cen- ters globally in 2014 but falling oil prices and political upheaval in Russia compounded the glut of global tea. As a result exports declined by 5.9% for the period January through June 2015. "It is imperative at this juncture that Sri Lanka look for new markets to export tea rather than being solely dependent on Russia and Middle Eastern countries already in crisis," according to an analysis by the Sri Lanka Tea Board in its quarterly Tea Market Update. The challenge for Sri Lanka, according to Dilhan C. Fernando, director of Dilmah Tea, will be to maintain, nurture, and enhance both the appeal and value of Sri Lanka's fabled Ceylon tea. Dilmah employs 31,500 workers and ex- ports tea to 100 countries, making it one of the world's largest tea companies. "Ceylon tea has unrivalled potential today, having the benefit of diversity in relation to the different terroirs… that are influenced by topology, climate and in particular the monsoonal conditions to produce dramatically different teas," said Fernando. "This diversity complements the quality of Ceylon tea, the seasonal phenomenon from Uva and Dimbula as well as the conservative agricultural practices." Low grown tea receives the highest prices at auction, followed by high grown and then mid. Colombo auction prices overall remain higher than the global average, in part due to the high cost of production and limited supply of high-quality orthodox tea. The Middle East, North Africa, and Russia con- tract for 90% of exports, demand that has elevated Sri Lanka to the world's largest exporter of quality whole leaf black tea.