Tea Biz
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Tea Biz News and Insight - April 1, 2022

ABOUT THIS EPISODE

HEAR THE HEADLINES – Sri Lanka Tea Harvest is Under Duress | China faces a Qing Ming Quandary | Tea and Productivity are Twinned 

| NEWSMAKER – Sri Lanka Tea Board Chairman Mr. Jayampathy Molligoda

| FEATURE INTRO – This week Tea Biz travels to Sri Lanka where London-based correspondent Dananjaya Silva speaks with the chairman of the Sri Lanka Tea Board about its decision to pursue a Geographical Indication by the European Union. GI status affords global trade protection under the World Trade Organization and officially recognizes the authenticity of the Ceylon brand.

Why Sri Lanka is Seeking Geographical Indication Status for its Ceylon Tea – Sri Lanka has been producing tea for well over 150 years marketed under the brand name Ceylon tea. Today the Sri Lankan tea board is looking to pursue GI Geographical Indication status for its much fame product. GI indication is a seal of authenticity used on products that have a specific geographical origin and possess qualities or reputations that are due to that origin. Correspondent Dananjaya Silva sat down with Sri Lanka Tea Board Chairman Mr. Jayampathy Molligoda to discuss how the tea board is pursuing GI status and what this means for prices for producers and for the nation's tea.

The Tea Biz podcast delivers tea news that you need to know, a recap of the week's major headlines, with commentary and cultural trends. Hosted by Dan Bolton. It is the voice of origin for tea professionals and enthusiasts worldwide. Think of us as a digital caravan of storytellers, bringing authentic, authoritative and exclusive stories to you weekly from the tea lands. Hello everyone here. This week's headlines. Shri Lanka's tea harvest is under duress. The Chinese face a key Ming Quandary. Tea and productivity are twinned. Plus, listen to why Shri Lanka is pursuing a geographical indication for Ceylon tea. Born a minute. But first this important message. What makes a Perfect Cup of Ceylon tea? The Perfect Cup is from the tea businesses that ensure the protection of all the children living within their tea estates. We Salute Kailani Valley, tell a Wacky Lee, Bogajan, Thalawa, Harana and Elyptia tea estates. Support Save the children. Sri Lanka. Tea Producers are under severe stress in Sri Lanka as the early harvest unfolds. The Sri Lanka teaboard reported to February mark the low's tea yield in thirteen years, down to eighteen million kilos, a drop of nearly twenty percent compared to the same period last year. Export earnings declined four point five percent in January. According to Ceylon tea brokers, electrical powers now limited to five hours a day, down from ten hours. Te Processing has shifted to night work so that rollers can operate continuously. There are nine hundred and ninety six registered gardens on the island and, while relatively few operate factories, every garden is dependent on fuel for transport. A diesel shortage since the beginning of March means stocks are now dwindling. Crisis spiked at a hundred and seventy six for Lonka rupease per leader, about two dollars and thirty four cents per gallon. In the US, gasoline is two hundred and fifty four rupeats per leader. Pmdt CEO Denninga Silva writes that, quote, tea estates that had kept stocks of fuel have been forced to provide fuel to their transport agents so that teas from the estates can be delivered to Colombo after being sold at the auction end quote. The cost of fertilizer is closely tied to petroleum prices.

Until last year, Sri Lanka spent an estimated three hundred to four hundred million annually importing fertilizer. Last May, the governments ceased importing fertilizer and in November discontinued a national fertilizer subsidy. Just as fertilizer prices were spiking, the cost of urea, a chemical essential to leaf production, increased sixfold. Farmers say they can no longer afford to feed their plants, resulting in nearly a fifty percent drop in production and food shortages. But even those who can afford chemical inputs find that the war in Ukraine has disrupted trade. Sri Lanka imports forty five percent of its wheat from Ukraine and sells nearly thirty million kilos of tea to Russia annually. Estate superintendence write that workers employed at tea gardens are queuing for hours to receive basic essentials, things like rice fuel, cooking gas milk powder. Rice now costs a third more than it did this time last year. Prices of vegetables such as carrots and tomatoes have increased five times. According to the National Consumer Price Index, food prices jump by six point nine percent and the inflection rate increased to fifty team point one percent in February two thousand and twenty two. Shri Lanka's tea industry generates a lot of revenue by adding value to book T's. The continued devaluation of the rupee means that materials for finishing goods, including packaging, cardboard and plastics, have increased in price, at a time when transport costs are at an all time high. Business inside the crisis and Sri Lanka is economic. Sri Lanka, and island crowded with twenty two million people, depends heavily on food imports, and normal times, imports are offset by seven point five billion spent by visiting tourists, revenue that decline by four point seven billion last year. The current trade deficit is six billion and foreign exchange reserves are nearly depleted. For in debt is high. Concerns about food security during the pandemic now reveal a serious vulnerability. Poverty is concentrated in row agricultural areas, with more than eighty percent of the poor living in villages. Micro credit indebtedness among rural farming communities is high and desperate, sometimes violent, farmer led protests are now becoming frequent, forcusing the military to intervene. Next week is keeming the official beginning of the Chinese tea harvest.

Conditions are favorable for the tea plants. Pre creaming, Bilo Chun Spiral Spring Green Snail tea sold this week for an average eight hundred and sixty seven dollars us for five hundred grams. According to the China Tea Marketing Association website. Finished Westlake Long Jing is selling for an average seven hundred and thirty per kilo as of March thirty, down from eight hundred and fifty dollars per kilo during the same period last year. It is still too early to harvest most teas, including Fujian Wu ye rock tea and taipeing how Qui. China is experiencing its highest rates of covid infection since twenty twenty. Mass have locked downs in mandatory testing to limit spread of the armochron variant are disrupting commerce at tea retail and restaurant venues. It is still early in the harvest, but the closure of ports will impact exports and restrictions on trucking limit mobility. Provinces in the north, near Korea and east are reporting five thousand new cases a day, with portions of Ushndong and Hibei province and all of Jilin in lockdown. Outbreaks are not widespread in the southern largest, ly rural tea growing provinces. The situation in Shinjin and Shanghai, home to twenty six billion people and the nation's financial center, are more troubling. Hong Kong is still recording twenty six thousand new cases daily and is suffering the world's highest fatality rate. Biz inside Te Biz is again publishing weekly average prices for a dozen of China's benchmark tees through May. China Price Watch calculations are local, reflecting domestic prices averaged from many different farms to determine a range. In general, the lower range describes tea available in quantity. The high range is influenced by scarcity, but in China many desirable, high value teas are grown in large quantities. Averages are calculated in Chinese one and converted to US dollars. Export prices vary greatly from the domestic averages listed in this weekly report. Friday summaries at the tea price report free. Subscribe for twenty fives us to get unlimited access to data sets from two thousand and twenty through two thousand and twenty two. visit the tea Biz portal to side up a certainly have. More than two thousand American consumers...

...found that tea drinkers place the highest importance on their health and that tea sustains their productivity during the afternoon's slump. The survey, conducted by one pole on behalf of celestial seasonings, focused on beverage drinking habits throughout the day. One in five, eighteen percent said they begin their day with tea, while sixty five percent rely on coffee. The studies suggests that persons who say they feel most productive in the morning prefer coffee. Those who say they are more productive later in the day drink tea. Coffee is more popular overall. Ninety percent say at boosts productivity, but only twenty nine percent say they maintain that motivation afternoon. Two out of five coffee drinkers. Thirty eight percent say that their mental health is constantly burdened with feelings of anxiety or stress. Only twenty five percent of tea drinkers report concerns about anxiety. The survey found that sixty three percent of Americans drink tea at least once a week, and then twenty three percent of all respondents say that tea is their favored beverage when they want to relax. Nearly twice as many people, Fifty eight percent, drink coffee daily as tea, thirty percent. Coffee remains popular with older Americans, but millennials now account for sixty percent of all who say they drink tea, with thirty four percent of millennials drinking tea daily. Business Inside Tim Collins, vice president and CEO of celestial seasoning, said, quote. Whether we're returning to the office working from home, we want to feel productive and energetic. People who have been surveyed for Millennia say that switching from coffee to tea can not only maintain that productivity but also provide many benefits. Collins said that quote. We are seeing a record number of consumers, ninety three percent in different age groups, assessing tea because of its health benefits and quote, coffee drinkers are similarly motivated, or Benda and in there. A man in Bengaluru reports on this week's tea auction prices in the ATTEA price report for the Week Ending Match Twenty Six, two thousand and twenty two. The speak media to bots say the Indiandia Association has asked a some government to urge the center to see how teas from the Baraquali can be sent to Bangladesh auctions. Currently, t from Baraquali and Tupura reach Kolkata auctions, which is at a distance of one thousand four hundred kilometers. However, some shares about it with Bangladesh and can easily take its tea to the STREAMUNGAL auction center. there. That a boat added that the expots to Banglades strict declined as recently as two thousand and seventeen, with...

...import duties rising first from thirty percent to seventy percent before becoming one hundred percent. The possible reopening of trade should benefit both countries. In weather, there is finally some relief for the arrival of the much delay dreams in northeastern India. The forecast indicates moderate to heavy read or our natural British Assum Wespengal seek him in the other states in the region. This week no auctions till twelve was held at Kolkatta and north India, CITC and Orthodox leave so better demanding better prices than sale eight, which is the last sale held here in the south, to leafty, pot Orthodox and city see leaf told higher volumes and for marginally higher prices, and exporters are finally becoming a little more active, hopefully a sign of better things to come. No word from or sponsor. Hello, I'm Boden, a passionate tea drinker and the inventor of the ultimate tea machine, the brewmmaker. One preparation is keyed to making fine tea. Sequential steepings delivered the best taste possible and unlock the true value of whole leaf teas and botanicals. Brew automates that process without using any pots or capsules. The simple to operate small from control device stores steeping profiles to consistently make great tea at the push of a bottom. Brew also reduces time, waste and energy. That's because colors I engineer to brew to Remember Control Settings for temperature, ruing time and quantity using my patented process. Lets you stag steep simply and conveniently. This week to builds travels to Sri Lanka, where London based correspondent and enjoy a silver speaks with the chairman of the Sri Lanka teaboard about its decision to pursue geographical indication by the European Union, gi status, or forge global trade protection under the World Trade Organization, and officially recognizes the authenticity of the siloon tea brand. Sri Lanka has been producing tea for well over a hundred fifty years marketed under the brand name of cylon tea. Today, the Sri Lanka tyboard is looking to pursue GI geographical indication status for it's much fame product. Gi indication is a sign used on products that have a specific geographical origin and possesses qualities or reputations that are due to that origin. This is done under silver and I sit down with trielink A teaboard chairman, MR giant put the money Gootta, to discuss how the teaboard is pursuing gi status and what this means for prices, for producers and for the nation's tea in two thousand and twenty one. STREELONKA launched the four point five billion rupee global...

...promotion to increase t export volume in value. The campaign's hobbets twelve markets, including the UK, EU, Asia and North America. Will you explain how geographical indication protects this investment in foreign markets? The W Teo, you must be knowing under W TO TRIPS agreement. TRIPS agreement is the Trade Related Aspects of intellectual property rights. So the law relating to geography indications originally emerge from the trips of agreement under WTO. Everything stems from that. Geographical indications are exclusively for things that like Silantis Lancinament, which identify this particular thing, in the case of face Lante as originating in Astri Lankan territory or even a region. Quality, reputation or any other characteristics of this particular celante is essentially attributable to each geographical origin. Philanti is a registered trademark owned by Trilanka tyboard in Sri Lanka. But what is important is global. Ninety five percent of our tea is being marketed in hundred and forty odd countries. At least fifty to sixty countries take about it ninety percent of our tea, so it's a reputed name global is. Unfortunately, over a period of time we have lost some of the markets like Pakistan, Egypt, even Russia. They are market sizes come down drastically for the tea and as a result we've been selling around twenty eight million kilos out of our two hundred and eighty million kilos. One important point. I ten piety will explain in detail. The CILON tea is associated with the Lion Logo. To qualify for the lion logo one has to pack in Sri Lanka hundred percent the or Cilanti. So that's the problem. The CILANTI, although is a register certification mark in Sri Lanka, it's not registered legally in other countries other than few countries. As a result, there had been some misusers in the name. We are able to take legal action on some of the infringements, so depriving our genuine exporters ability to service and increase the market train CILANTI products. Silantis unique. We all know silantis unique. Our Tea masters know how to how to prove that through t tasting methods, but that is not acceptable to EU countries. So you are to scientifically through that. The CILONTI originating from Sri Lanka, as is unique characteristics because of its geographical origin and, of course, the the a reputation factor. So...

...that is why we are trying to get this GI registration under intellectual probably rights induttation to the legal protection at the fourds. Will you discuss how geographical indication status, as it speaks to the unique qualities of Shrilonka's tea growing regions, Grei status establishes a strong, distinguishable and marketable reputation the GI status. It's a marketable reputation for producers because the producers follow farming traditions and its cleanest tea in the world. So that is the brand story CILONTI. The stories based on the fact that it's a cleanest tea in the world. My final question to you is, will obtaining GIS status help stabilize prices? Our objective is to not only stabilize even to obtain better prices in US dollar terms and get more market share. If you cover off our three hundred million kiloper and m production, basically it's two hundred and eighty five million NIS. Author. What is known as Orthodox type of Cilon T so that Orthodox type of Cilon Tis is not ideally suited for tea bags and that maybe one of the reason why we have lost in the mass market. The cities is different to authored. So we have to find a niche market. That is why we go by paytre will now explain the three pillars of our brand marketing strategy of Salon ty. It's a authentic product, as we explain, demonstrating our sustainability credentials compared to our other competing countries products. Say, for instance, farmers our regional plantation companies to practice the environmental sustainability and the social well being of the of the the people and and under Tea Control Act of teaboard, we ensure these fob prices are trickled down through the factories to the farmers. The wellness factor and the and the sustainability factors, we command a premium price. So, as a matter of factor, at the auction level, at the at the wholesale level, when we command three dollar fifty per kilo converted US dollar, at the columb auction, the Bombas auctions and Calcutta and all they get less than two dollar, roughly say two dollar. The correct information provided by ICT internationality council statistical Bulletine, as well as Fao, food and Agricultures Organizations Inter governmental group findings. So there is a tipping point for us to our exporters and markets to Y D at a very high price. So we pitch our...

Cilaron tea in that particulared niche differentiated product. So how to differentiate? It's only through GI indications. So that's that's the game plan. Just explain the t from the global t promotion using our differentiated strategy. Piety, intrigued by what you heard in today's podcast. Would you like to learn more from our global network of TB is journalists and t experts? Remember to visit the tbiz website from more comprehensive coverage. That's wwwt Biz bizcom. Thanks for listening. Farewell till next week.

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