Abstract:
Tea sector plays a vital role in Sri Lankan economy being the third largest income source of the country. The word 'Ceylon' is normally associated with quality black tea while Green Ceylon Tea is less well known. Ceylon green tea exportation is only a I% of the quantity of black tea exports. Unfortunately, the country has not been able to capitalize its' royalty advantage in green tea market.
Many tea importing countries impose tariff and non-tariff barriers for value added tea. Therefore market forces tend to promote more bulk tea exports than value added tea products. Sri Lanka exports both black tea and green tea as bulk tea. But green tea has high demand as well as high Free on Board (FOB) prices compared to the black tea. As an example, in the year 2010, green tea fetched a higher FOB price of Rs. 831.67 per kg while FOB price fetched by black tea was only Rs. 436.52 per Kg (Statistical tea bulletin, 2010). Therefore, exportation of green tea even as bulk is comparatively more profitable than exporting black tea as bulk tea.
The main objective of this study was to determine main factors which affect green tea exportation.
