LATEST NEWS PAGE

DATE UP-DATED: 15 - 11 - 2011


NEW STOCK ARRIVAL
A new stock of the hugely popular Iddalgashinna Biodynamically produced and certified GREEN teas has arrived as well as a new stock of the Kithul (palm sugar) in solid form and the treacle.

LACK of CERTAIN TEAS IN THE WEB SHOP
We are at a low ebb with some of our seasonal teas at present but the replacements have been manufactured and are being packed or have been packed ready for shipment in the next couple of weeks. We apologise for the inconvenience that this causes but I am afraid that it is something that goes with extreme quality seasonal manufactures which can only be carried out when the weather conditions allow us to have the manufactures carried out.

TEA RE-PLANTING PROGRAMME IN SRI LANKA

I understand that the Government have decreed that all company estates must speed-up the re-planting prgramme from 2 % per annum to 3 % per annum. This is good news as it will hopefully increase estate yields from their very low point at present, leading to greater opportunities for the tea pluckers to increase the quantity that they can pluck which with the new increase kilo overbound bonus system will allow them to contribute directly to the profitability of the estates and the estates will then feel more able to continue to raise the living standards of their workers. The recent high wage awards without sufficient linkage to higher production have proved unsustainable.

LAST CALL FOR JOINING THE 2012 ACCOMPANIED UNUSUAL VERY INDIVIDUAL TOUR TO SRI LANKA

Due to extreme pressure on hotel accommodation in the island during this high season period that we travel in for you to experience the 'Quality' season teas, we cannot take bookings later in the year as we need to confirm as soon as possible or the provisionally booked accommodation will be released and will not then be available.


Latest negotiation on wages in Sri Lanka:

The complete summary of the wages and benefits just agreed this year can be seen by clicking teh Fairtrade button and in the main page can be seen a link in red 'Download the Wages PDF'

The estate represenntatives and unions have just concluded the regular bi-annual negotiation on wages. After a period of hard bargaining during which the transfer of teas from the estates to the auction were stopped by the unions, a deal has been agreed. The estates are trying to make the unions aware that after a series of wage deals which have seen wages rise by 44 % in 2006 and 102 % in 2009 that these rises have made Colombo teas, already the highest priced of all auction centres in the world, uncompetitive plus the fact that the estates having raised the living standards of its workers to high levels compared to areas like Kenya and unable to fund certain field operations that are needed if the yields are to be raised in order to fund such high wages.
Long droughts have lowered yields on the estates and fields of aging bushes that need re-planting are not being re-planted at the rate that is necessary due to the lack of investment funds in spite of the higer tea prices.
This year has seen a lower wage settlement where hopefully the unions have realised that ever higher wage seetlements will hasten the arrival of plucking by machines and the abandonment of some of the best teas grown at high elevations where machinery cannot be employed. This situation is already underway in Kenya where the unions there are complaing bitterly about large numbers of redundancies which they equate to machine plucking and the estate companies such as Unilever are blaming the long droughts that are becoming regular events and lack of crop requiring lower numbers of pluckers.
The recent wage settlement has increased production costs by an average of Rs.45 per kilo of made tea. The problem goes beyond just the cost of the wage settlement in that higher wages equal higher contributions to the workersw Provident fund and estate contributions to the trust fund that funds worker welfare.
Fairtrade - Is it helping?:
Fairtrade contributes nothing to the estates directly, the only function that it has in Sri Lanka is that of promoting marketing of teas from the auction level but not direct sale teas at the estates and it's members contribute a small contribution to a workers fund but as we have seen Sri Lankan tea workers are highly paid with the recent negotiations and the worker fund can only be used for small items such as a mini bus or community hall which most estates already have in place from the government welfare trust or from direct estate contributions. The minus side of their contribution is that the estates are charged certification fees which keep rising and the office staff work burden is increased. Fairtrade organisations do contribute to worker welfare in areas like Kenya where the Government is not the owner of the land.

Facebook & Linkedlin Presence:

There is a page now on Facebook with links to this website and also a page on Linkedlin where I am active in discussions on tea via the 'Tea Group'.

Article that appeared in the Sri Lankan Daily Financial Times newspaper:

An article emanating from the British High Commission office in Colombo appeared in the local Sri Lankan Daily Financial Times about the importance of Ceylon tea to the island and suggesting some tips to help local tea producers to improve their marketing ability. It appears that some comments that I sent to the High Commission to some questions asked of me me by a member of the British High in Colombo have been quoted in the article. The link below will take you to the article.

http://www.ft.lk/2011/02/02/pure-ceylon-tea-nectar-of-the-gods/


2012 TOUR
I have received some inquiries from several people for a tour in February 2012 and so I am putting this together now with our contacts in the island. Once the final details are complete they will be entered into the comments to be seen via the TOUR button and I shall be hoping to finalise numbers as soon as is it is possible to do so after that as this is now becoming a hugely popular tourist destination.

2010 Estate - Union wages and benefits negotiations:
The estates are at present negotiating their bi-annual discussions with thew unions but as for the past two negotiations these are proving difficult. Each year the unions have demanded very large wage increases and because they are in a strong position with the estates short of workers they have won high concessions from the estates after striles and shutting down the release of the teas from the estates.
The 2009 negotiation gave the workers a basic wage of Rs.405/= up from their previous basic of Rs.170/= per day. However with the attendance bonuses and productivity bonus, they received Rs.260/= and in 2009 Rs.525/= per day.
The new negotiation at present is Rs.500/= from the estates but the union is demanding Rs.600/= and unfortunately at the moment the unions have stopped the releases of teas to the auction so there is a stand off.
Clearly any increase is going to impact on the cost of production and require the cost of Ceylon teas to rise with Colombo being the highest price auction centre in the world this cannot be good for future prospects of the resident workers should the estates have to bring in mechanical plucking and other labour saving practices. Mechanical plucking will mean abandoning many of the high grown steep areas and concentrating on less opportunities for the workers.
As I have already pointed out elsewhere the estate workers are now earning above equivalent worker grades in the capital city and have many more advantages with housing etc.


C arbon Footprint
Many consumers are concerned that the companies that they purchase products from, should be classified in some way to show that the company has made significant efforts to reduce their carbon footprint wherever possible.
As a business here in the South-West we have examined where we create a carbon footprint. Firstly we operate with the procurement of special manufactures of tea to our specific requirements. The fact is that tea is not grown in the U.K. at least not of any significance or the right quality so we are bound to work abroad and import the teas. Our operation will at all times where possible use containers and ship by the sea route. One ship will carry many hundreds of containers and it is the lowest footprint that is possible for imports. Occaisionally we get a client urgently requiring a batch of tea and in that case we may use air freight if it really is urgent.
Since we do not pack our teas here in the U.K. all that work is done in Sri Lanka before shipping and we try to use eco friendly packaging where possible with cartons etc being made from recycled materials.
Where small exports to Europe are required we have to supply from here but any large orders will be sent direct from Colombo by sea.
Finally I personally have always had an interest in woodland management from my planting days and as an extra activity to reduce our carbon footprint I have planted some 6 acres of new woodland on our own ground here besides having renovated 14 acres of run down woodland, re-planted it and sold it on.
This business will at all times in the interest of the environment and also in the interests of reducing costs strive to be as efficient as is possble.


The weather situation in the island is now dry and looks like building well for the season.

There is some encouraging news that the annual yield has risen to just over 300 million kilos from two years of depressed yields, although this may be due to the heavy periods of rain which tend to increase the flush from the bushes but also has a deleterious effect on quality.

I am about to post the 2010 statistics.
2009 & 2010 have been difficult years especially with the weather patterns changing and long dry periods reducing yields on the estates. These conditions have led to a deficit in world production compared to consumption and as a result the prices have risen year by year. Overall these price rises have kept the estates in business but they must concentrate on replanting and ensuring that yields do not drop further. Without replanting and the huge capital investment that is needed for this, the yields will fall more sharply.


FAIR TRADE:

I have again assessed our position on joining an ethical label such as Fairtrade and I contacted Fairtrade in September to dicuss where Fairtrade stood at present. This island is different to many other producing areas in that the Government hold the overall control on the estate lands and provides the welfare provision to the estates with teh estates making a contribution where they can.
I was able to up-date Mr. Byers at Fairtrade on the present situation that exists in the island with regard to wage levels and bonus payments since the latest bi-annual estate/Union negotiations finished in January. With the present situation we are still paying well over the odds for our teas to be made at the estates and morally membership cannot be justified.
I accept Mr. Byewrs explanation to me that Fairtrade does operate satisfactorily in most producing countries but that Sri Lanka does have a peculiar situation that they are looking at and may haver to adjust their system to.
This island has a shortage of labour on the estates and therefore the unions have been in a very strong position for some years now. The wage levels on the estates are now well above Colombo wage levels where employees have to find their own accomodation as well. I have written and up-dated the section on Fairtrade which is a section that can be accessed by clicking on the 'TRADE' button and this will release some three sections under Trade. In the Fairtrade section you can now see the wage levels that I have entered in the last paragraph of that piece. We are constantly under pressure to join these labels and it is a nightmare trying to get the situation that that exist across to potential buyers.
I have taken the opportunity to contact both the 'Which' organisation and also Mr. Harry Wallop at the Daily Telegraph in the hope that the media may one day put forth an accurate assessment on where these labels benefit producers and where they do not live up to their claims as it is vital at atime like this taht consumers know that the extra money involved in their purchases under these labels is being distributed to the benfit of the industries involved.

SRI LANKA TOUR / HOLIDAY 2011

Having completed a very successful tour in February and I thank all those who wrote in to say how much they appreciated the tour, I am now receiving a number of inquiries about the possibility of another tour in 2011. I now have the prices for this and they are posted in the Tours section at the bottom of the page. I shall be closing applications for the tour by 30th. September and if we have the minimum number to allow the tour to go ahead it will be booked in at that point. Accommodation is tight now that hostilities in the island have ceased and it is imperative that the facilities that we need are secured early on.

2009 GREAT TASTE AWARDS

The full listing of all the Taste Awards can be viewed at:---- http//www.finefoodworld.co.uk
In 2008 we were awarded 5 Gold awards for ourr teas taking our total awards to 38 since 1999.
We are very pleased to announce that this year our teas have been awarded 6 Gold awards in all:

SINGLE ESTATE - LOOSE TEAS SECTION:

LOVER'S LEAP F.B.O.P. ------------------------ 3 Star Gold
LOVER'S LEAP O.P. 1 Spl ---------------------- 3 Star Gold
UVA SEASONAL BEST LIGHT F.B.O.P.---- 3 Star Gold
We were the only tea supplier whose teas were awarded 3 Gold Stars

UVA SEASONAL BEST SPEC ED.------------- 2 Star Gold


SINGLE ESTATE - TEA BAGS SECTION:

IDDALGASHINNA GREEN Bio/Org --------- 1 Star Gold -----Highest stars awarded 2 stars


BLENDED TEA - TEA BAGS SECTION:

Natural EARL GREY ----------------------------- 1 Star Gold ----Highest star awarded 2 stars



THE UVA 2010 SEASON


We have been watching the quality in the Uva area developing for this season and the build-up of dry weather with the wind intensity building is good at present. Another week or so is likely to produce some excellent Uva teas.


Market News

July - August: 2010

The Uva season was unfortunately like the Western season not sufficiently strong for us to purchase Uva teas of a sufficient quality and we shall be relying on the low stock from the excellent 2009 season and hoping that 2011 will be a big improvement. After some very heavy rains in June to July when Colombo streets were under water at times, the weather did eventually clear with intermittent rain in late July and there was some dry period later. The rains returned in September and only in the last week or two in October has the weather shown signs of drying up. Prices for the Uva season were down on last year but prices have been recovering and are now running at high levels again.
We are hoping that January 2011 will usher in a respectable Western season and we look forward to purchasing some excellent teas, all being well.

May - 2010
The island has experienced very heavy rains for several weeks now as the S/West monsoon has its final fling hopefully. The level of rainfall created flooded roads in the capital city Colombo. Now in thye first week of June the rains appear to have abated and the first signs of drier weather may be heralding the approach of the required dry spell of weather that usually arrives in Julu/August and builds with the arrival of the Cachan wind to allow the manufacture of some real Uva quality classics. Unfortunately weather patterns have changed greatly in recent years and we shall have to wait and see!

During May the quality of the teas were at low point with the heavy rains on the estates and the offerings in the Colombo auctions received much lower prices struggling to maintain an auction average of S.L. Rs.330 - 350 for the last week in May. Wioth the onset of better weather prices are likely to recover again as quality teas feed into the auction again.

The Colombo auction has again in 2008 recorded the highest prices for teas compared to all other tea auction centres in the world. This highlights the demand that there is for and the quality of Ceylon teas.
World prices for teas also rose in the first three quarters of the year but dropped in the final quarter due to the world recession. The quarter saw Ceylon teas experiencing high prices due to the blocking of Kenyan teas late in 2007 from the civil disturbances there. When Kenya came back into the market again in the third quarter the Ceylon Uva season quality raised prices in spite of the return of the Kenyan teas to the market. In the fourth quarter oil prices suffered and dropped which deterred purchases by strong clients for Ceylon teas in the Middle East and Russia.
In spite of the problems above 2008 showed a healthy increase in prices at 11.2 % over 2007, production was also up 13.8 million kg on 2007. Looking at the first half of 2009 the prices have been strong and 2009 could be another record year for prices. However there is a 33.8 million kilo shortfall in Ceylon tea production due to a drought period in the first two qtrs of 2009 and a world shortfall of some 80 million kilos.
India is also contributing to a tightening of the amount od tea available for export as her population consume increasing qunatitities of teas with the rising standards of living there.