COLOMBO, May 17 (Xinhua)-- Trouble is brewing in Sri Lanka's tea industry with planters and exporters at odds over liberalizing imports to expand the country's highest foreign exchange earning crop, an official said here on Thursday.

Government policy aims to double current exports to 20 billion U.S dollars by 2020 for which tea exports have to grow from the current 1.5 billion U.S. dollars to 5 billion U.S. dollars. For this the Plantations Ministry has been tasked with evaluating the establishment of a tea hub in Sri Lanka.

However strict control of tea imports have hampered companies from blending and exporting tea from Sri Lanka, explained Tea Exports Association Chairman Niraj de Mel.

"Sri Lanka accounts for 10 percent of the world's tea consumption but has the highest production costs in the world. However, Colombo auctions are the largest in the world and we already have a wide variety of tea that can be used for blending with premier foreign tea," he stressed adding that more tea could be imported from India and China if policy changes are made.

Nonetheless, The Planters' Association of Ceylon (PAC), which comprises over 400,000 small holdings and produces 70 percent of the national tea crop, insists that imports could undermine the quality of tea exported from Sri Lanka.

TEA and PAC has split the industry down the middle with producers and exporters taking directly opposing views, analysts observe.

The Sri Lankan government is to take a final decision on whether or not to import tea at the end of the year.

May 17, 2012

Source: Xinhua

• Viet Nam’s trade surplus with EU expands amid economic headwinds
• Steel, cement and electricity firms to trade emissions quotas under Viet Nam's carbon market
• VCCI proposes 11 recommendations to quantify support for SMEs
• Trump’s copper tariff decision hangs over global metal market
• Global capital sees potential in Europe but calls for lighter regulation