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« on: June 23, 2010, 10:14:05 AM »

Leaf Competition
21 June 2010
Sri Lanka tea trade calls for limit on new factories


Sri Lanka's tea trade has called for a stop to the setting up of new factories unless they are supported by cultivated tea lands to prevent 'excess capacity' and competition for green leaf.
Avi de Silva, chairman of the Colombo Tea Traders' Association, said they were concerned about the proliferation of tea factories unsupported by cultivated tea lands.

"There are over 700 factories presently in operation, of which a very large number fall into this category," he told the CTTA's annual general meeting.

There was a continuously increasing excess in capacity of factories in relation to the availability of green leaf supplied by small farmers.

As a result, the majority of factories are operating under capacity, creating severe competition for leaf, the CTTA says.

But more tea factories also means that smallholders get good prices for their their produce. This can stimulate higher levels of leaf production.

But the CTTA believes it hurts quality.

"This unhealthy competition has had a negative impact on the quality of the end product, which would eventually be damaging to the image of 'Ceylon Tea'," de Silva said.

New factories continue to be set up despite a decision by the regulator, the Sri Lanka Tea Board, to suspend approval for the construction of new factories.

This was mainly on account of "external pressure" on the Tea Board, de Silva said.

"A solution to this problem may be to deny approval for the construction of any new factories, unless each factory has a minimum extent of 50 hectares cultivated in tea to exclusively support manufacture in that factory."

Source: LBO.lk http://lbo.lk/fullstory.php?nid=577363677
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