Niraj de Mel, Chairman, Sri Lanka Tea Board speaking to PRIU from Islamabad after the Free Trade Agreement was signed between Sri Lanka and Pakistan said he was happy that a quantity of 10 million kg of tea at zero duty had been included in the FTA.
“Pakistan being one of the five largest tea importers in the world with a very high per capita consumption and Sri Lanka being the largest exporter of tea, the tea trade that prevailed to date was lopsided. Sri Lanka’s market share was little under 3% whereas Kenya’s was over 60%. With the signing of this agreement and through which there is concession for tea will certainly help bring about some equilibrium to the tea trade between the two countries.
“My gut feeling is that the leading packers in Pakistan would increase their off-take from Sri Lanka. However, Pakistan although has preference for strong teas from African CTC’s is ultimately a price conscious market. The law of supply and demand will finally determine the outcome of the duty free quantity granted to Sri Lanka. All factors being normal. I look forward to at least doubling of Sri Lanka ’s tea exports to Pakistan i. e. 6 - 8 Million kg,” he said.
The other immediate benefits to Sri Lanka from the FTA is that there will be duty free benefits for its exports of natural rubber, almost all coconut products, spices, natural graphite, paper and paper products, copper and aluminium products and so on in the Pakistani market.
Niraj De Mel was part of the delegation led by President Chandrika Kumaratunga to Pakistan last week.
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