Remarkable growth in Sri Lanka tea exports to China in 2007

Ceylon Tea performed exceptionally well in the Chinese market and achieved a remarkable growth of more than 65% in comparison to the previous years’ exports. Although China is a huge market with more than 1.3 billion people, predominately users of green tea and Oolong tea.

China has been identified as very promising emerging market for Black Tea. Their demand for beverages is higher with the growth of their per capita income.

The startling growth of Ceylon Tea Export to the Chinese market can be attributed to the enthusiasm and efforts of the Ceylon Tea Exporters who were guided and coordinated by the Embassy of Sri Lanka in China and the Tea Promotion unit of the Sri Lanka Tea Board in Japan targeting an intense promotion of Ceylon Tea in the Chinese market.

Commonly known as red tea (hong cha), black tea accounts for a mere 1-2 per cent of China’s huge RMB80 billion tea market. But innovative flavours and modern packaging are winning new consumers from the younger generation.

The results clearly show that though black Tea consumption though a new experience, it is becoming more and more popular in China.

The volume, which was 172 tons in 2003, jumped to 456 tons in 2004,478 MT in 2005, 588MT in 2006 and a record 880MT up to Nov 2007, thus showing signs that.it may reach 1000 MT once the data for the December is released.

As a result of the continuous efforts of the Sri Lankan Officials, adjustments were made to the tariff regulations by the Chinese Customs with regard to Ceylon Tea gave a much needed boost for the growth of Export flow in the later part of the year and now Ceylon Tea exports enjoys a preferential tariff rate of 7.5% under APTA as against the general tariff of 15% to China.

The embassy together with the Tea Promotion Unit of the Sri Lanka Tea Board based in Japan facilitated the participation of Sri Lanka tea exporters at several high profile trade fairs held in main cities such as Beijing, Shanghai, Tianjin and Kunming to promote Ceylon Tea.

World of Food China, FHC Beijing and Shanghai, Beijing Tea Expo, Tianjing Shopping Festival and the South Asian Commodity Fair Beijing, all offered excellent opportunities for the Ceylon Tea to be promoted in the rapidly growing Hospitality and Retail markets in China.

Sri Lanka reaped many positive responses during the first ever South Asia Commodity Fair, which was held from December 28 to 30 2007, at the Beijing Exhibition and Convention Center.

A record number of tea exhibitors /companies (13) displayed Ceylon Tea at the Sri Lanka pavilion at the fair, attracting a whole host of opportunities for Sri Lanka exporters to penetrate the Chinese market.

During the China Tea Expo-Beijing Sri Lanka presentation won the best cultural presentation for demonstrating the making of ‘Ceylon Tea’ depicting a traditional Sri Lankan family.

During the year, efforts were taken to promote the health benefits of black tea, using posters and promotional materials in supermarkets, at exhibitions, and on forthcoming television advertising.

The embassy carried out an awareness campaign among the Sri Lankan exporters with regard to the free web advertisement opportunity given by the Ministry of Commerce in China and as a result, many Ceylon Tea brands now appear in the web site.

This is important, given the Chinese preoccupation with food’s role in health. Efforts were taken to create awareness among the Sri Lanka Tea Exporters on the Chinese market through media by publishing articles in magazines and daily newspapers.

Tea Exports 2006-2007

Year Total Quantity

2006 578,371.00

2007 969,006.50

Growth of Ceylon Tea Exports to China

The above growth was achieved in all the form of Tea Export during the year 2007 when compared to 2006.

Further the data issued by Sri Lanka Tea Board based on Sri Lanka Customs data clearly shows that number of Companies that export Ceylon Tea to Chain has increased dramatically with new exporters emerging. The no. of exporters in 2006 was 26 and it has increased to 35 exporters during the year 2007.

The awareness campaign carried out by the Embassy among the Sri Lanka exporters paved the way for many of them to find agents and distributors for Ceylon Tea in the Chinese market. 2006 2007 Bulk 440571 612021 Pack 6228 14311 Bags 43503 47640 Instant 0 48 Green 36780 173215 Other.51289 41021.

All these efforts have brought immense benefits to the Sri Lanka tea sector but lot needs to be done and during the Olympic year 2008 Sri Lanka Embassy and its commercial section will play an intense role in promotion of Ceylon Tea by focusing on the Health aspect of Black Tea and promoting more value added black tea and to eliminate any non tariff barriers, if exist, by having a closer relationship with the authorities in China.

Every effort will be made to facilitate participation at more and more trade fairs in the food and beverages sector in China for the Tea sector by negotiation with the organisers for free/concessional rate booths as it was done during the year 2007 where the participation at the Tianjin Shopping festival and China Tea Expo was possible due to the successful negotiations Embassy had with the organisers thus resulted in granting us free participation at these fairs.

The exports of Black Tea are on a continuous upward trend and we should keep this momentum up especially considering the 2008 Olympic Year and the 2010 Shanghai World Expo.

The youth segment in China does not want to drink tea in this hot form and prefer cold tea.

The Sri Lankan entrepreneurs should aim at trying to get leverage out of this drastically transforming market place in China.

Seek assistance Chinese companies in jointly promoting ready to drink tea from Sri Lanka in the Chinese market. Since China has the fastest growing, largest middle class in the world, the demand for imported products and new items is amazingly huge.

Therefore, the trend for the Chinese consumers, particularly the younger generation to favour Ceylon Black Tea which is a new product to them is fast appearing in the horizon.