Ceylon Chamber of Commerce (CCC) Chairman Chandra Jayaratne in a letter to President Chandrika Bandaranaike Kumaratunga says that the Tea Industry seeks Government intervention similar to the support extended by it to the ‘Recovery Plan’ drawn-up by market participants engaged in the tourism industry.

Tea (US$ 700 million), after Garment exports (US$ 2,982 million) and foreign remittances (US$ 1,160 million) was Sri Lanka’s third highest foreign exchange earner last year, while Tourism was in fourth place with US$ 252 million, according to the Central Bank’s 2000 Annual Report.

Jayaratne in his letter points out that the plantations industry, mainly the tea sector, has also been adverseley affected by the unfortunate incidents at the airport. The initial confusion and the subsequent disruption caused to the smooth delivery of tea samples to overseas buyers have led to a significant negative impact on tea auctions.

The due settlement of the contractual obligations in terms of the auction conditions have been rendered difficult. "It is to the credit of the management of the tea sector market participants including the Colombo Tea Traders Association that the weekly tea auctions continued to be held as scheduled despite these unexpected obstacles," says Jayaratne in his letter.

However, the tea sector market participants must be assured that these disruptions will be minimised and the incident associated cost increases are of a very temporary nature. Especially that the disruption in the despatch of samples via courier service and the lifting of air freight parcels from Colombo will be normalised and adequate air freight connections to all destinations will be available at costs acceptable to the market participants.

And that the proposed increases in sea freight rates, consequent to ships insurers classifying Colombo Port as an area of high risk, taken together with the increased cost of cargo insurance for the same reason, which will result in Sri Lankan tea becoming uncompetitive against comparable tea from other countries will be withdrawn or be in force only for a short period until ship insurers are assured that Port security is adequate.

Jayaratne also urged the President to secure the Colombo Port from any possible terrorist attacks and assure ship insurers and the shipping industry of its safety. "This is of paramount importance in the eyes of overseas buyers of teas as they may, if they place a continuing high risk on the Colombo Port, consider moving their purchase sources to other competing tea producing countries.

He further says that in the midst of these challenges, the ‘strike’ at the Jaya Container Terminal (JCT) in the Colombo Port is of grave concern to the tea sector, since it’s having a very serious effect on the movement of export cargo.

In common with other exporters, the tea exporters have been adversely affected by the industrial action in the JCT and several containers of tea pending exports are held up. This could lead to a severe liquidity crisis in the tea sector, especially because settlement dates will be postponed. ‘Even the weekly tea auctions scheduled for yesterday and today may have to be stayed,’ Jayaratne says.