Tea Market Update

Volume 7 No 3 J u l y — September 2011

EXTERNAL FACTORS IMPACT TEA INDUSTRY

The year 2011 commenced with optimism for the tea Kenya still shows a 30 million kilo crop decline but industry after five long years of buoyant tea prices is expected to bridge the gap by end of the year with which was unprecedented in the history. Due to pro- estimated shortfall of 15 million kilos. Sri Lanka is duction shortfalls , particularly in Kenya, Sri Lanka expected to show a decline of around 8 million kilos and India up to end of first half 2011, global tea by end of December. China is forecasted to show a prices were expected growth of at least 100 to hold at generally million kilos. Indonesia strong levels . Even apparently will be 10 the strong domestic million kilos down. consumption in When the global countries such as production figures are China and India fore- computed, it is casted bright tea estimated that the tea prices for producers. volumes for the year However the volatile 2011 would be showing situation in the Mid- a surplus of almost 100 dle East, Gulf and million kilos. India for North Africa, the the first is expected to tsunami and other up reach the one billion -heavels in Japan, the Specialty tea of the year—Moscow kilos mile stone. Simi- economic sanctions larly China is bound to on Iran as well as the depreciation of local currency create the largest ever production figure reaching in many consumer countries reacted adversely to close to 1.5 billion kilos. Therefore a deficit global boost tea prices. The deficit in tea production in production equation it is projected to reach a surplus India was wiped off by the third quarter and is show- situation putting further pressure on tea prices by end Tea Production 2 ing a surplus of 37million kilos as at end September. of the year. Cont. in page 5 ….

Tea Marketing 3 General Overview

Tea Exports 4 Economy Tea Industry

Global Tea Scene 5 According to the General Statistics of Central Bank Escalation of cost of production per kilogram of releases, Sri Lanka’s textile and garments, rubber made tea due to wage hikes and prolonged drought based products, and food and beverages exports made huge blow to plantation companies specially Trade Fair Participa- 6 contributed more to the national GDP with double plantations spread at High and Mid grown region in tion digit growth for the fist eight months of 2011. While third quarter. Regime change turmoil in Middle services sector followed similar pattern of growth East and European debt crisis continued to weigh on for the period. Asian export markets. Following Colombo tea auc- News in Brief 6 Both earnings from exports and expenditure on tion prices behave disgusting for all three regions, imports increased further on a year-on-year basis till despite offering decreased during third quarter. August 2011. This resulted 50 percent imports Research Update 8 increased compare to the last year same period. Tea exports volume growth comes after two quar- Worker remittances of $3.3 billion and International ters of contraction, and indicates an annualized rate Sovereign Bonds of $ 3.1 billion helped the govern- of growth of 1.5%. Exports grew in the third quar- Editor-Sampath Perera ment to cover up the huge balance of trade balance ter, greatly buoying the Agriculture exports share, ($6 billion) for the period. Hence exchange rate which relies in sales to foreign trading reflecting a E-mail remained steady as average of Rs 109.75 for the third return to normality. [email protected] quarter 2011 also. The twelve month moving average of inflation Web-site Continue in page …………….5 www.pureceylontea.com ended at 7.2 percent in September 2011. Tea market update Volume 7. No. 3 P A G E 2

+ Tea Production

During third quarter 2011, the total crop volume stood at 74.6 Mil- Private, and Plantation Management sectors followed similar pattern in distribution of tea production based on lion Kgs, which was marginally lower by 5.5% compared to 78.9 Million Kgs recorded during same period of 2010.For the period, ownership, production come down compared to last year same period and further drop recorded in government under review only low grown production was recorded a margin- ally higher at 49.3Mkgs. It is depicted in table 1. estate sector as shown in table 2.

Table 2 – Distribution of Tea Production (Jan- Table 1 - Tea production during the third quarter Sep) according to the Ownership (MKg) 2011(Million kg). 2011 2010 July - Sep Change % Sector Category Production % Production % Change

2011 2010 Qty % Private 135.9 55.4 136.9 54.9 -0.8 Elevation Plantation Co. 101.2 41.3 102.2 41.3 -1.0 High 14.7 17.0 (2.3) (13.5) Public 8.1 3.3 9.2 3.7 -12.1 Medium 10.6 13.2 (2.6) (19.7) Total 245.2 100.0 248.3 100 -1.3 Low 49.3 48.7 0.6 1.2

Tea manufacturing in Central hills and Western region, Total 74.6 78.9 (4.3) (5.4) the country’s main tea producing districts, have dropped Processing 9 percent in the first nine months, attributed to poor Method weather in third quarter. Following Badulla and Kandy Orthodox 69.2 73.6 (4.4) (6.0) districts recording poor crop in corporate sector is facing CTC 4.8 4.5 0.3 6.7 difficulties.

Green Tea 0.6 0.8 (0.2) (25.3) Table 3.- District wise tea production Total 74.6 78.9 (4.3) (5.5) as at Sep 2011 (Mt)

CTC is the next leading manufacturing method after Orthodox for ADMIN. DIS- Ceylon tea having producing 4.8 Million Kgs for the quarter, TRICT HIGH MEDIUM LOW TOTAL which recorded a slight increase . Green tea production showed a COLOMBO 0 0 0 0 marginally drop though it improved by 5% in first quarter and by (8%) in the second quarter. HAMBANTOTA 0 0 158,786 158,786 MATALE 0 3,830,678 332,725 4,163,403 Chart 1 - Cumulative tea Production comparison KEGALLE 0 504,046 7,799,693 8,303,739 Jan-September 2011/2010 KALUTARA 0 0 13,349,622 13,349,622 KANDY 546,792 13,840,559 7,359,549 21,746,900 Monthly Total Prod. BADULLA 12,806,017 10,503,134 0 23,309,151 (MKg) Prod. MATARA 0 103,559 31,341,440 31,444,998 246 (MKg) 40 GALLE 0 0 38,092,455 38,092,455 245 35 RATNAPURA 127,542 1,815,629 47,795,001 49,738,171 244 30 NUWARA 46,269,245 7,970,826 610,803 54,850,875 243 25 ELIYA 242 20 Total 59,749,596 38,568,430 146,840,072 245,158,098 241 15 240 10 239 5 Tea Marketing Total Jan Feb Mar Apr May Jun Jul Aug Sep

Total - 2010 Total - 2011 2010 2011 The sharp decrease in the Colombo Tea Auction average prices which started from the Tea plantations across the high and mid grown recorded a lower last two sales of second quarter production, while low grown fields experienced a moderate pickup continued particularly hurting in production in first nine months to mark 241Mkgs. Although low plantation companies with low grown sector showed a continues improvement , it did not com- production due to poor weather. pensate for the drops recorded in other two elevations. It is signifi- The figures depicted in table 4 cant to note that, after May production pattern recorded a contin- revealed that quantity marketed ues decline in 2011 and 2010 due to prolonged drought. in third quarter

PUBLICATION OF TEA PROMOTION DIVISION — SRI LANKA TEA BOARD Tea market update Volume 7. No. 3 P A G E 3

able 6 –Grade wise quantity sold and price than that in 2010, but the average sales price in all comparison as at September 2011 disposal channels was decrease by Rs 18 per kilogram attributed to Middle East crisis. All three elevations had Grade Qty (Kg) % Avg. Price recorded comparatively low prices following medium FBOPF1/FBOPF 28222077.04 11.25 412.10 grown affected mostly than that in third quarter 2010. FBOP1/FBOP 25131604.38 10.02 414.08 Table 4 –Teas Sold and prices fetched in BOPF 23461903.64 9.35 340.20 third quarter 2011 FOP/OP1/OP 21385921.04 8.53 385.71 OPA 17940072.8 7.15 328.68 2011 2010 FP/PEK 17108632.7 6.82 373.27 Elevation Qty Price (SL Price Qty Price (SL Price PF/FNS/FNS1 15659551 6.24 269.15 (MKg) Rs) (US$) (MKg) Rs) (US$) BOP 15101878.2 6.02 357.30 High 19.5 300.29 2.73 18.9 309.1 2.7 BP/BM 12814768 5.11 268.07 BOP1A 11855613 4.73 268.43 Medium 13.7 298.2 2.71 14.5 319.7 2.8 DUST1 10330560 4.12 328.57 PEK1 9343339.26 3.73 411.31 Low 51.1 373.67 3.40 51.2 393.9 3.5 PF1 8553965 3.41 359.69 BOP1 6681371.6 2.66 Total 84.3 344.45 3.13 84.6 362.2 3.2 445.36 OTHERS 27220154.03 10.86 385.70 Total sales 250,811,411.69 100 362.27 Table 5– Weekly Auction sales comparison during the quarter (Rs/Kg) Based on particle size and liquor quality tea grades fetched varied price level at the Colombo Auction in its way to High Medium Low Average Month Auc. Num Difference 2011 2010 2011 2010 2011 2010 2011 2010 26 291.71 287.55 294.09 288.46 358.08 370.81 330.25 338.30 -8.05 27 291.70 285.36 295.10 297.08 368.69 374.57 334.25 341.08 -6.83 July 28 292.41 288.36 295.95 301.82 372.80 376.19 340.08 343.60 -3.52 29 295.93 293.77 304.83 308.06 387.22 387.51 351.36 353.47 -2.11 30 296.28 293.89 305.74 307.84 376.31 377.25 345.85 347.57 -1.72 31 292.04 298.64 306.30 314.17 374.98 392.17 344.46 357.69 -13.23 August 32 293.70 307.57 297.76 322.10 373.41 406.18 342.39 369.73 -27.34 33 297.63 307.77 297.25 329.46 378.42 413.10 345.77 377.49 -31.72 34 293.41 313.55 299.42 328.77 386.82 419.74 353.47 385.70 -32.23 35 303.63 324.64 300.57 333.27 367.65 403.50 344.05 376.28 -32.23 September 36 305.21 339.39 293.79 331.58 372.01 407.13 346.11 381.23 -35.12 37 301.95 336.49 292.08 323.31 368.93 402.03 343.98 375.88 -31.9 38 302.18 332.94 290.91 316.52 371.69 397.31 347.45 370.99 -23.54 blending or straight line exports. Hence, longer experience of Thirteen auctions were held for the quarter at Colombo Table 7: Teas sold and prices fetched by auction and sharpened the price decrease during the distribution channels (Qty:Mkg, Price Rs./Kg) August and September months though winter season’s buying activated this period usually. Different Third Quarter At 30th sale , there was a one time slight narrow the gap Channel 2011 2010 in the average tea price at the Colombo Tea Auction compare to the last year same period. The price falls in Qty Price Qty Price the world market then led to the domestic average price Public Auction 83.4 343.55 83.4 361.7 decrease to below Rs 350 per kilogram after the unpre- dicted price hike of above the Rs 350/kg level at 34th Private Sales 0.4 448.31 0.8 370.9 sale though gap increased remained to Rs 32/ kg com- Direct Sales 0.5 406.51 4.1 445.4 pare to corresponding sales to the last year. Total 84.3 344.45 84.6 362.2 The decrease in medium and high grown prices contin- ues to be a worrying phenomenon, particularly for Plan- higher demand and favorable price in tation companies and region’s tea small holders, in light the auction, manufacturers offered lar- of the possible cash flow limitations for re-planting, fac- ger share of most Flowery Peko grades tory upgrading and socioeconomic impact on domestic this year too. Table 6. depicted the first inflation. nine months details of grades wise sales.

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Tea market update Volume 7. No. 3 P A G E 4 Tea Exports

The total value of teaP exported A G E 4 in third quarter was $392 million, Table 10 - Top ten destinations of Ceylon tea up by $23 million (6.2 per cent) from third quarter of 2010. Tea from Jan-Sep 2011 Units : Qty - MKg packets exports made a large contribution to this increase, after the bulk export value. During the third quarter, exports surged Change Exports % Country 2011 2010 slightly by 0.4 per cent to 87.2Mkgs and the average FOB price Qty % 2011 2010 of tea also rose 3.1 per cent to Rs.495.56 per kilogram against the Russia 34.3 29.4 4.9 16.7 15.7 14.5 same period of last year. It is depicted in table8. Iran 20.8 18.3 2.5 13.7 9.5 9.0 Table 8 - Export Statistics for each month during Syria 20.8 18.7 2.1 11.2 9.5 9.2 the third quarter Units: FOB-Rs./Kg, value-million U.A.E 16.3 21.7 -5.4 -24.9 7.4 10.7 Turkey 15.0 12.6 2.4 19.0 6.8 6.2 2011 2010 Change Category Iraq 14.9 8.3 6.6 79.5 6.8 4.1 Qty(Mt) FOB Qty FOB Qty(Mt) FOB Japan 8.4 7.3 1.1 15.1 3.8 3.6 Azerbaijan 8.4 6.5 1.9 29.2 3.8 3.2 July 29,339 482.91 28,837 473.43 502 9.48 Kuwait 6.7 8.6 -1.9 -22.1 3.1 4.3 August 31,347 499.10 28,742 482.32 2,605 16.78 Jordan 5.5 11.0 -5.5 -50.0 2.5 5.4 Total 151.1 142.4 8.7 6.1 69.0 70.4 September 26,528 505.36 29,248 484.91 -2,720 20.45 Russia emerged as the top export destination with 15.7 Total 87,214 495.56 86,827 480.24 387 15.32 percent, followed by Iran with 9.5 percent, Syria with 9.5 percent, UAE with 7.4 percent. As revealed in table 10

top ten destinations of Ceylon tea represents 70 percent of In first nine months of 2011, tea exports reached 233.7 Mkgs the total tea exports of the country , continuing the same with re-exports earning $1 billion. Tea export prices for Ceylon trend of last year. tea currently stand at the highest of the world average prices. The figures indicated in the table above shows that Iraq

imports of Ceylon tea is reaching a level of normalcy after Table 9 - Tea Exports during Jan –Sep of the year longer period of war and disturbances in the country’s (2011/2010)Units : FOB - Rs./Kg, Value –Rs. million food and beverage market. As such , the Dubai hub for transshipment to neighboring countries like Iraq is ex- 2011 2010 Change % Change Category Qty (kg) FOB Value Qty FOB Value Qty (Kg) FOB Value Qty FOB Value Bulk 91,589,066 445.48 40,801 80,156,530 438.72 35,166 11,432,536 6.76 5,635 14.3 1.5 16.0 Packets 106,439,370 477.05 50,777 94,108,552 452.07 42,543 12,330,818 24.98 8,234 13.1 5.5 19.4 Tea Bags 18,061,843 928.85 16,777 16,245,456 761.17 12,365 1,816,387 167.68 4,412 11.2 22.0 35.7 Instant Tea 3,160,885 637.21 2,014 1,172,510 761.50 893 1,988,375 -124.29 1,121 169.6 -16.3 125.5 Green Tea 0 0.00 0 693,199 991.45 687 -693,199 -991.45 -687 -100.0 -100.0 -100.0 Other Tea 23,851 544.59 13 9,935,267 699.85 6,953 -9,911,416 -155.26 -6,940 -99.8 -22.2 -99.8 Sub Total 219,275,015 503.40 110,382 202,311,514 487.41 98,609 16,963,501 15.99 11,773 8.4 3.3 11.9

Re-Exports 14,498,900 641.55 9,302 28,095,729 522.39 14,677 -13,596,829 119.16 -5,375 -48.4 22.8 -36.6

Total 233,773,915 511.96 119,684 230,407,243 491.68 113,286 3,366,672 20.28 6,398 1.5 4.1 5.6

Shipment of tea packets and tea bags rose by 13 and 11 percent pected to deride from 94Mkgs and 16Mkgs kilograms in 2010 to 106Mkgs and 18Mkgs kilograms in 2011 reflecting a growth in value addition. Ceylon tea exports to Jordan declined by 50 percent from The value addition in export of tea bags reflects a notable growth (11Mkgs in 2010 to 5.5MKgs in 2011) which impacted on of 35 percent compare to the last year. country’s value added exports share because of ninety percent of Jordan’s total imports represented tea packets The country’s re-export tea quantity, dipped by 48 percent but and tea bags. average FOB price rose 23 percent as at September 2011 from the same period of last year and is depicted in table 9. The average Iran offered the best FOB value per FOB value have risen by Rs. 20per kilo (4%). kilogram and Kuwait recorded lowest average FOB price at top ten destinations list for the review period .

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Tea market update Volume 7. No. 3 P A G E 5

……………..………….from page 1.. Crop General Overview Production was declining month by month and came to low- Weather est level at the end of the quarter. Westerns and Uva regions especially, showed moderate declining in crop intake whilst Bright weather prevailed in through out the days followed strong low grown reported slight decrease. winds in most areas of the tea growing districts. This resulted by prolonged drought condition withering most fields in High and Mid Quality grown plantations. Quality of teas produced irregular throughout quarter.

GLOBAL TEA ……from page 1

The global economic crisis, the Middle East and Arab world insta- Thus, replanting and infilling to increase yields and there by bility, and the weak currencies in consumer nations may not augur productivity has been identified as a priority factor along well for the global tea fraternity. with the global promotion and marketing of Ceylon tea in value added form linked to the lion logo and Sri Lanka own The Colombo tea auction prices which averaged at Rs. 376/Kg for brands. high grown, Rs 355/Kg for medium grown and Rs 411/Kg for low In the mean time, the Russian federation and USA are both grown with a National Sale Average Rs.394/Kg in January 2011 expected to import record levels of tea volumes in 2011. declined significantly to Rs 304/Kg for high grown, Rs 296/Kg for Even in 2010 USA purchased 127 million kilos of tea. medium grown, and Rs. 370/Kg for low grown by end of Septem- During the current year they expect tea volume to increase ber reflecting a NSA of Rs.345/Kg. In comparison, the high grown by a 2-3 %. The very strong health message is a positive averaged Rs335/Kg in September 2010, Medium grown Rs.328/ contributory factor. The Russian Federation will also import Kg, and low grown Rs. 403/Kg last year. The corresponding NSA more volumes in 2011 probably inching closer to a record in 2010 was Rs377/Kg. On the contrary, cost of production in Sri 180 million kilos. The civil commotions in Pakistan and the Lanka due to increase in labor wages and other related costs have disaster in Japan will result in lower off-takes by those spiraled upwards resulting in a threat to the viability of the indus- countries. try.

Trade Fair Participation Sri Lanka Festival- 2011 - 10th - 11th SEPTEMBER 2011. Sri Lanka Tea Board participation at Hong Kong In- th th ternational Tea Fair 2011, Hong Kong from 11 to 13 This is an annual event and this year it was held for 08th con- August 2011 sequent year under the theme of “land of peace and tranquil- ity” at the popular Yoyogi Park in the heart of Tokyo City, This is the third time Sri Lanka Tea Board participated at this Japan. event. The event provided an excellent opportunity for local and inter- This event has expanded year on year and this year there were national businessmen in Tea and other related products to guar- 100 stalls from private and public sectors including Sri Lanka antee new avenue for business in Hong Kong as well as Tea Board, Tourist Board, Bank of Ceylon, Sri Lankan Air Mainland China and its neighboring countries like Taiwan, Ma- lines. cao and Southeast Asia countries. GIDA 2011 in Istanbul, Turkey, 22nd – 25th 12 Tea Companies were participated at the fair along with Sri September Lanka Tea Board namely; Vintage Teas (Pvt) Ltd, Jafferjee Brothers, Stassen Exports (Pvt) Ltd, DSS Teas (Pvt) Ltd, Sind- Sri Lanka Tea Board organized the participation of 03 private bad (Pvt) Ltd, Senok Tea (Pvt) Ltd, Millennium Teas (Pvt), Cey- sector tea exporting companies at GIDA 2011 trade exhibition lon Tea Lands (Pvt) Ltd, Michael White & Co. (Pvt) Ltd, Es- that M/s Imperial Teas (Pvt) Ltd, M/s. Jafferjee Brothers and waran Brothers (Pvt) Ltd, Empire Teas (Pvt) Ltd and Maskeliya M/s. Ceylon Tea Marketing (Pvt) Ltd. Sri Lanka Tea Board Tea Gardens. coordinated all the logistical arrangement for the participation of the exhibitors. Sri Lanka Tea Board has organized Tea Tasting Session at the event with the support of our co-exhibitors.

PUBLICATION OF TEA PROMOTION DIVISION — SRI LANKA TEA BOARD P A G E 6 Tea market update Volume 7. No. 3

P A G E 6 th th Polagra Food Fair – Poland – 12 to 15 September Despite the production increase of Kenya in third quarter, 2011 the excess amount did not compensate to cover the huge crop losses in first six months in East African region. China Sri Lanka Tea Board Organized a country pavilion at the and North India reported month on month progress in pro- Polagra fair 2011 with 4 Tea exporting companies, namely duction and ended up with 76 Mkgs adding to the cumula- Ranfer Teas (Pvt.) Ltd, Delmege Teas (Pvt.) Ltd, Stassen Ex- tive figure of world tea production compared to the last year ports (Pvt.) Ltd and BPL Teas (Pvt.) Ltd . same period.

World Food, Russia – 13th to 16th September 2011 Overall average prices during first nine months behaved Sri Lanka Tea Board organized the participation of 08 private unsatisfactorily though higher cost of production in every sector tea exporting companies at World Food 2011 in Mos- tea producing countries suffered heavily. This happened cow, Russia namely Asia Teas (Pvt.) Ltd, Ceylon Tea Land due to demand stagnation in recession affected economies (Pvt.) Ltd, Stassen Exports (Pvt.) Ltd, Empire Teas (Pvt.) Ltd, and regime changing conflicts in most tea consuming coun- Millennium Teas (Pvt.) Ltd, Imperial Tea Exports (Pvt.) Ltd, tries. Kelani Valley Plantations and George Steuart (Teas & Mar- World tea exports by producer countries is led again by keting) Pvt. Ltd Kenya and China is at second place, with Sri Lanka placed at third the third position with a deficit of 12MKgs behind China as at end Of June 2011. Global Tea Scene

Global Tea Production NEWS in brief It is reported that three percent increase in world crop attrib- uted to favorable weather prevailed in tea plantations located

Table 10 -Global tea production up to September CEYLON TEA REACHES ITS ZENITH AT compared with 2010/2011(Mt.) PRESTIGEOUS TRADE EXHIBITION Country Months 2010 2011 Change Ceylon Tea created history recently when the Sri Lanka NE India 9 512645 554040 41395 Group Stand for tea was adjudged by the official Committee South India 9 180352 175753 -4599 as the best country pavilion during the International food & Bangladesh 9 38138 40603 2465 drink exhibition, World Food in Moscow. Russia is one of China 9 1004000 1094000 90000 the most competitive growth markets and World Food at- tracted products of over 1,420 exhibitors from more than 60 Sri Lanka 9 248272 245,159 -3113 countries around the globe. The World Food is a premier Kenya 9 289473 259769 -29704 international trade exposition held once a year for the food Malavi 9 42140 37141 -4999 & beverage industry where the world leading organizations Uganda 9 41741 36511 -5230 compete for business in Russia and CIS countries. Under the able guidance of Hon. Mahinda Samarasinghe, Minister Zimbabwe 9 10544 10276 -268 of Plantation Industries, Sri Lanka Tea Board, the apex state Indonesia 9 55445 46280 -9165 organization for the Tea Industry reviewed its strategy of Tanzania 9 23487 23438 -49 participation at International Forums. From a low key pas- Total 2,446,237 2,522,970 76733 sive role, the Tea Board ably backed by a team of profes- sionals from the industry has initiated a high profile active * Till August Source : INTTEA role for the promotion of Ceylon Tea in important target at far from the equator performed well compared to last year markets. The results were instantaneous and the famous same period. green gold of the island nation reached a pinnacle at the 20th Chart 3 - Average prices in major auction centers

2011 2010 Change Auction Qty sold (MT) US $/Kg Qty sold (MT) US $/Kg Qty (MT) US $/Kg Kolkata 112663 2.9 106181 2.8 6482 0.1 Cochin 45586 1.8 46168 1.7 -582 0.1 Chittagong 33470 2.3 37561 2.5 -4091 -0.3 Mombasa 249273 2.7 273797 2.5 -24524 0.2 Jakarta 25169 2.0 31062 1.8 -5893 0.2 Colombo 250811 3.3 248934 3.2 1877 0.1 Guwahati 81111 2.4 80293 2.4 818 0.1 Malawi 11431 1.6 13513 1.6 -2082 0.0 World 809514 2.8 837509 2.7 -27995 0.1

PUBLICATION OF TEA PROMOTION DIVISION — SRI LANKA TEA BOARD P A G E 7 Tea market update Volume 7. No. 3

Session of the prestigious World Food exhibition when the the decorative tea boiler which had special windows at the country tea pavilion was awarded as the best group stand. base to display winning teas from the competition.

“This year we took the World Food Exhibition by storm with a sterling performance and a Tea Pavilion which all our com- petitors envied” says Hasitha de Alwis, Director (Promotion) Sri Lanka Tea Board who led the delegation to Russia.

He also observed that “all in all, many of the other stall holders also prominently displayed Ceylon tea packs. This resulted in Ceylon teas’ dominance of the entire tea & coffee hall at the exhibition”. A Sri Lanka architect who graduated from Mos- cow, Sanath Abeysekera designed and constructed the pavilion for Ceylon Tea under the supervision of Ambassador for Sri Lanka, Udayanga Weeratunga winning the award for the best Tea Tasting session at exhibition national Group Stand at World Food 2011. The achievement gained at this important exhibition in Russia is a tribute to the successful work done by the Sri Lanka tea exporters over the years. Sri Lanka Tea Board and the private sector tea exporting companies had been participating at World Food Exhibition For the first time ever, Ceylon Tea was auctioned in Russia at in Moscow on an annual basis for the past so many years. the World Food exhibition. Five kilos each of 09 gold win- The participation at 2011 exhibition held recently had special ners, 07 silver winners and 07 bronze winners totaling 115 significance due to several other promotional events lined up kilos of award winning teas were sold at the Charity Auction by the Sri Lanka Tea Board in collaboration with Colombo in Moscow generating nearly US$ 16,000 (Rs. 1.7 million). It Tea Traders’ Association to support Ceylon Tea in Russia. works out to an average price of US$ 140 (Rs.15,000/-) per The Ceylon Specialty Estate Tea of the Year Competition kilo which is a record achievement under any circumstances. final round and the Charity Tea Auction were special features The highest bid was by Mlesna Russia at US$ 6000 for a five which attracted the attention of all participants to the exhibi- kilo lot of FBOPF Extra Special sold under the “Tea Bank” tion and drew Russian tea mark which won the gold connoisseurs and gourmet tea award from Ruhuna agro- buyers to the Sri Lanka pavil- climatic region. The per- ion. A presentation on Sri formance of the Sri Lanka tea industry supported Lanka auctioneer Anil by audio visual screening Cooke, President of Asia strengthened the position of Siyaka Commodities Ceylon Tea.A majestically (Pvt) Ltd., Colombo was constructed Sri Lanka tea pa- extra ordinary and not a vilion covering 90 square me- single winning lot at the ters placed in a prime location competition went unsold. at Pavilion two of World Food Incidentally, the Charity was the centre of attraction to Tea Auction commenced many visitors. with subdued bidding for the first few lots but the environment kept-on The stalls were well decorated heating-up with fun-fare with Lion logo, seven GI lo- escalating and bidding gos and Ozone logo promi- getting stronger. nently highlighted in gigantic placards while rotating boxes Sri Lanka Pavilion at Trade Fair –Moscow His Excellency Udayanga in the shape of tea chests were Weeratunga, Ambassador mounted on top of the pavil- for Sri Lanka to Russia, ion. the Chief Guest of the event himself, actively bid in support of Charity. The experi- A 20 feet tea boiler at the entrance to the pavilion created a ence of the market and the knowledge of the Russian language unique atmosphere which was the hallmark of the Tea Board of the Sri Lanka Ambassador added great impetus to the pro- booth which visitors would remember for a long time. Many ject. The Mlesna Moscow office emerged as the most success- Russians and prospective customers from the CIS, the land ful being able to out bid the audience and win six lots at the traditionally famous for Soviet Samovars were intrigued by auction. Special thanks should go to all the active participants at the Charity Tea Auction.

PUBLICATION OF TEA PROMOTION DIVISION — SRI LANKA TEA BOARD Tea market update Volume 7. No. 3 P A G E 8 The Russian Federation continues to remain as the single, fully fermented or fully natural aeration process). About 78% largest buyer of “Ceylon Tea” with off-takes in the region of percent of the global tea drinkers prefer to consume black tea. 45 to 50 million kilos per annum. “Despite the discrimina- Whereas, Sri Lankan black tea accounts for about 20% of tive tariff and non-tariff barriers for exportation of Ceylon global tea consumption. During the past, majority of the re- Teas in value added branded form, more than 15% of all teas searches have concentrated the antioxidant power in green tea but limited work on black tea.

A collaborative study of the scientists in the Sri Lanka Tea Board, Tea research Institute of Sri Lanka and the University of Colombo reveled that, Sri Lankan black tea possesses dose- dependent antioxidant activity both in-vitro (in laboratory tri- als) and in-vivo (in animal experiments). In this study exam- ined the polyphenols content in black tea and their hot water extract under standard brewing method.

And evaluated the antioxidant activity using BOPF grade (produced in a tea factory situated in 1382m, average mean sea level) with two different methodologies (DPPH assay and Participants at Charity tea auction - TBARS assay) in rat model. However, it is of interest to note Research Update that, in the experimental settings, the antioxidant activity (in terms of antioxidant index) of the extracted tea solids was com- from Sri Lanka still goes to Russia” according to Director parable to that of vitamin E on wt/wt basis. (Promotion) at Tea Board. It is also significant, that 30% of the tea market requirement In-vivo antioxidant activity was studied in rat blood serum us- in this former Soviet Union country is supplied by Sri Lanka ing DPPH assay. All the doses showed time-dependant (low despite severe competition from new entrants such as Kenya, dose by 12th week, mid dose by 8th week and high dose by 4th Vietnam, China and Indonesia while traditional supplier dur- week) and dose-dependent antioxidant activity. This antioxi- ing Communist era, namely India is making strong in-roads dant activity appeared to be present as long as tea was adminis- to reclaim market share. Today, Russia is the undisputed trated. In the concluding remarks, Sri Lankan black tea could leader in tea imports to the world and purchases 180 million be used as biologically safe natural antioxidant supply. kilos every year, constituting 10% of the global tea import trade. Therefore, daily consumption of black tea may be a remedial solution to prevent appearing of heart disease, the people un- aware of the disease. And also the treatment while having re- freshment and affordable to many of population categories. Sri Lankan Black Tea (Camellia sinensis L.) as Antioxidant Supplement to Control Heart Disease Reference: Abeywickrama, K.R.W., Amarakoon, A.M.T. and Rat- nasooriya, W.D. (2005). In-vitro and in-vivo antioxidant activity There are a number of clinical studies suggesting that the of high grown Sri Lankan black tea (Camellia sinensis). Sri Lanka antioxidants in daily consumed foods and beverages are the Journal of Tea Science, 70 (2): 57 – 68. main factors for the observed efficacy in reducing the inci- dence of chronic diseases including heart disease and some cancers. The main characteristic of an antioxidant is its abil- ity to trap free radicals or highly reactive oxygen radicals present in biological systems (i. e., body) generate from wide variety of sources. If present, these free radicals may oxidize nucleic acids, proteins, lipids, or DNA and can initiate de- generative diseases. Phenolic acids, polyphenols and flavon- oids are known to act as effective antioxidant compounds found in some daily consumed food and beverages naturally.

The black tea brew, world popular daily consumed beverage Sri Lanka Tea Board after water is known to contain appreciable amount of poly- 574,Galle Rd, Colombo – 03. phenols ( 15 - 30%, on a dry weight basis) which vary ac- Tel :2587814,2582122 Fax : 2587341 cording to the origin of produce. There are three main types Email : [email protected] of made tea categorized base on the manufacturing process: green tea (produced by unfermented process), oolong tea (produced by partially process) and black tea (produced by

PUBLICATION OF TEA PROMOTION DIVISION — SRI LANKA TEA BOARD