World tea talks open amid boycott

World tea talks open amid boycott

COLOMBO (AFP): The first ever tea producer's meeting opened
here yesterday with calls for unity to boost prices despite
Kenya, a key exporter, boycotting the talks.

Sri Lanka is hosting the two-day meeting of India, China,
Bangladesh, Indonesia, Malawi to finalize a constitution and
agree on joint marketing and research sharing, Sri Lanka Tea
Board chairman Clifford Ratwatte said.

He said it was disappointing that Kenya kept away despite
confirming its participation. However, Iran, which is a major
importer of tea, was attending the meeting.

Sri Lanka's deputy minister of plantations, Athauda
Seneviratne, expressed the hope that other tea producers would
join the association and "work jointly for the betterment of the
industry of our countries."

"Let us consider this an opportunity to renew goodwill and
commitment towards the unity of all tea producing countries,"
Seneviratne said.

"(This) will be the message the world receives from the tea
producing countries at a time like this when a concrete step has
been taken for the creation of the Association of Tea Producing
countries," he said, adding ministerial meeting would be held
later this year to ratify the grouping.

He said producers received only a fraction of the high prices
consumers paid in the West for their daily cup of tea. The local
auction prices have been steadily declining, seriously affecting
growers, he said.

The price of a kilogram (2.2 pounds) of tea, around US$2.25 in
the early 1970s, dropped to $1.25 last year despite the retail
prices climbing to five-to-$10, Seneviratne told the meeting.

"I wish to emphasis the need to move ahead rapidly in
achieving not only the consensus but also the clear commitment to
the (tea) association among the producing countries before it is
too late," he said.

Tea traders in Sri Lanka, the world's largest exporter of the
leaf, said they hoped the association would eventually lead to
the formation of a cartel to regulate prices by imposing export
quotas.

The coming together of India and Sri Lanka, both major
producers and consumers, could have a strong impact on prices and
augur well for the industry, said Lallith Ramanayake, director at
John Keells Ltd., a leading broking house.

He said Kenya may feel compelled to join if the association
produces results by way of joint marketing strategies and sharing
research results in the short term.

Brokers said Kenya, the key African producer, was unwilling to
enter any forum which had the potential to eventually impose
export quotas to regulate world tea prices.

Kenya, which has a highly productive tea industry, has been
unaffected by falling international tea prices thanks to low
production costs, unlike other producer countries.

Sri Lanka's tea industry, the country's main foreign exchange
earner, has been in serious trouble with prices falling way below
the cost of production.