STiR coffee and tea magazine

STiR coffee and tea 23 picky in terms of selecting a reasonably good standard of leaf. What about price? We give them a small incentive for what we call super leaf. Let's say the current standard of fine-leaf pluck (two leaves and a bud) is at about 50 to 55% of what they pluck. When we get something over 60 to 65%, then we give them an incentive for that amount of leaf they bring. So that's encouraging them to raise the bar for themselves and get some- thing back in turn. We teach them that the higher the tea price at the auctions, the higher the green leaf payment according to the tea board's formula. That's the positive side of this cycle, we keep telling them. Sri Lanka's tea industry aims to make production sustainable. Is this on your agenda? Sustainability is something that we are also looking at. Smallholders are fully aware of its importance. Sustainable practices at the factories and by the company contribute to stickiness amongst loyal smallholders. So, for us, it's not about paying something a little bit more than the competition when taking leaf. It's about actually looking at enhancing the livelihood of the community and the smallholders. By fulfilling our social responsibility and engaging in community relations, we build a positive reputation that enhances our brand image and fosters a sustainable supply chain through trust and cooperation with growers to ensure a steady supply of high-quality tea leaves. Moreover, our support and investment in local communities contribute to their economic development by creating jobs, generating income, and promoting the growth of local businesses. Maintaining high standards ensures that our tea manufacturing operations align with the expectations of international customers who prioritize ethical and sustain- able products. How much of your tea supplies domestic consumption? Not much. About 85–90% is for export markets. The Middle East, Russia, Iran, Iraq, and Turkey are the main markets. Higher prices for Ceylon tea in 2022 impacted demand, lowering export volumes. However, export earnings overall fared exceptionally well, increasing by 54% to $1.27 billion in 2022. The main reason for the drop in export volumes was reduced demand from Russia and Ukraine. Russia dropped to no. 3 with the war going on. They had been no. 2. At the onset [of the war], there were concerns about payment and logistics. Now I think they've found ways and means of trading without dollars. Iran and Turkey also purchased less tea from Sri Lanka. The lower demand from Iran mainly stems from the devaluation of the Iranian rial. Iraq Russia UAE Turkey Iran Azerbaijan China Saudi Arabia Libya United States $147 $123 $118 $71 $70 $66 $48 $45 $42 $40 0 25 50 75 100 125 150 Major Export Destinations for Ceylon Tea by Value (2022) Top Five Export Value: $529 million Value in US$ Million source: Sri Lanka Export Development Board

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