ECONOMYNEXT – Sri Lankan tea exporters are facing new hurdles in the form of tough tests for chemical residues in markets like Germany and Taiwan after overcoming similar problems in the Japanese market, a top exporter has said.
Rohan Fernando, chairman of HVA Foods which markets tea under its Heladiv brand, said exporters were forced to take precautions by having their teas tested by foreign laboratories.
“Overcoming the chemical residuals exceeding limits detected in Japan has now led to a series of obstacles in Taiwan, Hong Kong and Germany with regard to teas from Sri Lanka being subjected to stringent laboratory tests for non compatible traces of chemicals,” he said.
“For brand owners it has become a nightmare, as detection of chemical traces would mean the death knell for the brand,” Fernando told shareholders in the firm’s annual report for the 2018-19 financial year published after a delay.
“As a precautionary measure most exporters now rely on foreign laboratories to certify the teas prior to shipment. It means high costs and delays in deliveries.”
HVA Foods, which lost 367 million rupees in the 2019-19 financial year, its biggest in the last five years, has just been taken off the watch list of the Colombo stock exchange after its annual report was filed after a delay.
Fernando attributed the delay to the company’s switch from manual to digital accounting procedures and the need for the company to audit the system and re-audit stocks for opening balances.
Sri Lankan tea exporters lost orders from Japan in 2018 after a ban on the glyphosate weedicide, since lifted, prompted growers to switch to other weedicides which left chemical residue levels higher than allowed.
Japan returned some tea shipments and even threatened to stop imports of Ceylon Tea unless the ban on glyphosate was lifted.
(COLOMBO, 21 November 2019)