Tea auction in Sri Lanka 

Sri Lanka is a South Asian country, which holds it is named for manufacturing one of the best and magnificent teas. Sri Lanka produces around 300,000 metric tons of tea per year. Besides 90% of it goes to buyers at tea auction in Sri Lanka. You may have heard about Sri Lanka tea and might be wondering how to buy it. You can easily buy them through online platforms. 

History of Colombo Tea auction Sri Lanka

 

In the office of Somerville & Co., (Janadhipathi Mawatha), conducted the first tea auction on July 30, 1883. Previously, many tea plantation owners exported Ceylon teas to the London Tea Auction or overseas buyers directly.

 

The auction itself was only moderately successful, with only one lot of Kabaragala un-assorted tea selling for cents 45 per pound, while the other four lots remained unsold due to a lack of offers or bids that did not meet the Broker’s expectations.

 

After setbacks, Somerville & Co. and the other brokers persevered, and in 1885, they were able to hold daily auctions. The Ceylon Chamber of Commerce (CCC) founded the Colombo Tea Traders’ Association in 1894 to establish rules for the Colombo Tea Auction. They promoted buyers’ and sellers’ shared interests in the Colombo market. Colombo Tea Auction (CTA) developed from humble beginnings to become the world’s largest tea auction in terms of the number of lots sold. Mombasa, Kenya, has been the largest tea auction in terms of volume traded for many years.

 

Recent trends in Colombo tea auction 

 

CTA has undergone several transformations over the years to adapt to changing circumstances. Usually, auctions will be held in one auction room in the CCC Building on Chatham Street daily on one day of the week. As the number of lots and the amount of tea sold at the Colombo Tea Auction increased, the auction split into two days. The CCC Board Room transforms into a second auction room as the number of lots increases. The new CCC building at Nawam Mawatha included two custom-built auction rooms, but these proved inadequate over time, and the Colombo Tea Auction now takes place on two days of the week in three different auction rooms.

 

Today, as tea factories increase the number of grades available to satisfy buyer demand, the number of lots available increases as well, putting additional pressure on the system. Because the auction will conduct over two full days, Tuesday and Wednesday, buyers will be under a lot of pressure to sample, grade, and assess up to 12,000 different lots of tea during the rest of the week to be able to bid on teas at the following week’s auction.

 

The Sri Lanka Tea Board and the CTTA are now weighing the benefits of automating the Colombo Tea Auction with modern technology to improve efficiency while lowering operational costs. The ultimate goal is to make the Colombo Tea Auction more transparent and less expensive to run, increasing competition and creating a win-win situation for all participants and stakeholders.

 

Electronic tea auction

 

As a precaution against the Covid-19 pandemic, Sri Lanka’s Colombo Tea Auction has moved to an online platform. The Colombo Tea Traders Association made this hasty and critical decision because it was the only way to keep the tea trade afloat. The historic first online auction was successfully conducted on April 4 with the full support and cooperation of all stakeholders.

 

Sri Lanka produces around 300,000 metric tons of tea per year, with 90% of it going to buyers at the Colombo Tea Auction. The Colombo Auction, after Mombasa, Kenya, is the world’s second-largest tea trading center, handling an average of 6,000 to 7,000 metric tonnes of tea per week. It means that even a one-week trade cancellation would place a strain on subsequent sales.

Despite the fact that Colombo’s manual tea auction had been well developed and organized to the best of its ability; some suggest the computerization of the auction. Also, some trials conducted in the last 20 years to reduce costs and increase performance. 

 

After the Covid-19 was spread throughout the world, because of it, realized the importance of electronic tea auctions. On March 31, the CTTA held the first emergency committee meeting, with the attendance of auction brokers and IT engineers. 

 

“The initial idea was to simply list the tea, but the team later developed a bidding system. It advanced from there to become more sophisticated. We worked 20 to 22 hours a day and began live tests on the third day,” said Asia Siyaka managing director Anil Cooke. He was an auction broker and also the leader of the process of implementing electronic tea auctions.

 

Moreover, the mental block of humans, he said, was the most difficult obstacle to conquer in completing the e-platform. “Many of us were skeptical and afraid it wouldn’t work out. Or the load was too heavy to bear, causing access speed and system usability to suffer,” Cooke added. 

 

The committee provided the software and allowed each of the approximately 350 registered buyers two to three IDs. After correcting several issues discovered during trials, the first-ever e-auction was conducted on April 4th at 11 a.m., with sales continuing on the fifth and sixth. 

“We are pleased that no serious system errors have occurred so far, but we will continue to improve the interface to make it more user-friendly,” Cooke said.

 

Also, buyers seem to be enthusiastic about the electronic tea auction. “It is indeed a big move for the tea trade,” Mabroc Teas (Pvt) Ltd’s tea-buying department said. The bidding method is the same as it was previously. In terms of efficiency, however, there is limited room for improvement. We will undoubtedly see such progress shortly. As in the initial auction process, accountability is maintained.”

 

Tea exporters association 

The Tea Exporters Association was established in 1999 through a group of leading tea exporters intending to promote and protect the mutual interests of its members. The privatization of nationalized tea estates in the mid-1990s, as well as the rapid growth of private tea factories in the same decade, were the primary motivators for tea exporters to band together under the T.E.A. banner. 

 

It is a limited-by-guarantee association that registered with the Registrar of Companies under Companies Act No. 7 of 2007. The value of the Tea Exporters Association was recognized by policymakers, and in 2001, he was invited to join the Sri Lanka Tea Board’s board of directors. The Tea Exporters Association became livelier because of the introduction of many complicated problems, and it is now the “voice” of tea exporters. 

 

Since 2007, regulatory agencies, government ministries, trade chambers, and a variety of forums have contacted it. Currently, the association’s members account for more than 85% of the country’s annual tea export volume and revenue. Every year, a management committee of 20 leading and a few smaller tea exporters from the membership is elected to oversee the association’s affairs, with the guidance of a Chairman and two Vice-Chairmen.

 

The Tea Exporters Association is currently assisting the government in achieving a target of US $ 20 billion in export revenue in 2020, with a tea contribution of US $ 3-5 billion by that time. The Tea Exporters Association produces Tea Strategy documents regularly and introduces them to policymakers to help the industry face its potential challenges. The association frequently hosts workshops and lectures on key business topics to help participants improve their expertise and skills. 

 

It also makes recommendations to the Ministry of Finance for inclusion in the National Budget. TEA also raises issues in importing countries that affect Sri Lankan tea exports with the relevant government agencies and foreign missions in the hope of resolving them through negotiations. For the good of all stakeholders, TEA also invites world-renowned experts in tea marketing, value addition, and branding to give speeches at its Annual General Meeting.

 

Sri Lanka tea board

 

On January 1, 1976, the Sri Lanka tea board was established following several acts and ordinances as below.  

• Tea Control Department-Tea Control Act No 51 of 1957
• Tea Export Commissioners Department-Tea (Tax and Control of Export) Act No 16 of 1959
• Tea Research Institute of Ceylon-Tea Research Ordinance 1925 
• Ceylon tea propaganda board (tea propaganda ordinance in 1932) 
• Sri Lanka tea board law No.14 of 1975 as amended by Act No.17 of 1985, No.44 of 1990, No.29 of 2003, No 44 of 2006, and No.13 of 2018 

 

The Sri Lanka Tea Board, as the regulatory body, is in charge of regulating the tea industry’s activities, such as production, expansion of cultivation, replanting, renovation of old gardens, and the establishment and operation of factories. Moreover, to ensure the “Quality of Ceylon tea,” the entire process would be tracked and evaluated from the factory to the shipment.

 

Furthermore, many steps are implemented to improve the control of tea quality levels at the point of sale, pre-shipment, broker, blender, and exporter warehouses, as well as offering advice on hygienic blending and storage. Under its development functions, Sri Lanka Tea Board supports subsidies for factory improvements and tea replanting, as well as awareness programs on minimizing post-harvest harm and efficiency, and tea quality certification through sensory and chemical analysis. Marketing and promotion of Ceylon tea in the global market, compilation and analysis of tea statistics, and delivering competency of the actual markets and ability to maintain and extend Ceylon tea among leading markets are all covered by promotional activities.

 

Ceylon Tea

The flavor can vary depending on where the plants are grown. This is why Sri Lankan tea is so special. Since the nineteenth century, Ceylon tea has been the base tea of choice for most tea manufacturers around the world. Sri Lankans believe their groundwater has a magical quality that allows them to grow great tea plants as well as brew them. The Camillea sinensis plant can be used to make four different types of tea. Although the plant is the same species, the soil and weather play a role in the flavor of each plant. Tea grows in five different areas in Sri Lanka, each at a different elevation. Each region produces a tea with a distinct flavor. All Sri Lankan tea producers sell loose-leaf or pyramid bagged tea.

 

Must taste amazing Sri Lanka tea types

 

• Black tea

 

The most popular form of tea is black tea. Ceylon black tea is the cleanest tea on the planet since it contains no chemicals or additives. Professional female tea pluckers will hand plucked the leaves for black tea. They pick only two leaves and a bud in large amounts, which are then dried and sifted after that withered, rolled, and fermented. The leaves can be divide into various grades after sifting. Orange Pekoe is the name given to the largest wiry leaves, which are preceded by several grades until dust grade. Each grade has its distinct color and strength.

• Green tea

 

Outside of Sri Lanka, Ceylon green tea is rapidly gaining popularity. Green tea is produced in a different way than black tea, although both from the same plant. The leaves are not fermented, so their antioxidant properties are preserved. The leaves were picked, withered, and heated before rolled, dried, and sifted. Ceylon green tea, like black tea, is pure and clean.

 

• White tea

 

White tea is Sri Lanka’s most distinctive tea. Because of the way it is harvested, it is also the most costly. Only the buds of white tea are plucked, and they are done so delicately at dawn. The buds will roll by hand individually and will not ferment. White tea is the only tea that is produced entirely by hand. White tea has a light and subtle hue. White tea contains less caffeine and more antioxidants than green or black tea, making it one of the healthiest choices.  White tea, also known as “Silver Tips,” is available in loose-leaf or pyramid bags at all Sri Lankan tea shops.

 

Sri Lanka tea types (based on regions)

 

1. Nuwaraeliya

 

The scent of cypress trees, as well as the menthol of wild mint and eucalyptus, float through the air, contributing to the tea’s distinctive taste. Tea connoisseurs have compared Nuwara Eliya, at 6,250 feet above sea level for Ceylon tea, to champagne for French wine. 

Lightly brewed tea has a silky feel.

 

1. Udapussallawa

 

The tea grown on the Uda Pussellawa mountain range, located east of Nuwara Eliya, has two cycles of superior consistency. The standard eastern quality season runs from July to September, but the first quarter of the year’s dry, cold conditions produce a variety of rosy teas. These teas had a glorious flavor thanks to their medium body and subtle character.

 

1. Dimbulla

 

Dimbulla is probably the most common name associated with Ceylon tea since it was one of the first areas to be cultivated after tea replaced coffee in the 1870s. The plantations situated between 3,500 and 5,500 feet (1,100 and 1,700 meters) above sea level, cover the district’s western slopes. The monsoon rains and the cold, dry weather produce a variety of teas, ranging from robust to delicate.

1. Uva

 

The Uva teas, which grow on the eastern slopes of Sri Lanka’s central mountains at elevations ranging from 3,500 to 5,500 feet (1,100 meters to 1,700 meters) above sea level, have a truly unique flavor. These teas are widely used in a variety of blends, but they can also be enjoyed on their own due to their distinct characteristics.

 

1. Kandy

 

Kandy, the ancient capital of Ceylon, was also the first place in Sri Lanka where tea was grown. These full-bodied teas can grow on plantations between 2,000 and 4,000 feet (600 and 1,200 meters) in the mid-country. Ideal for those who prefer their tea strong and flavourful. Milk is the perfect accompaniment.

1. Ruhuna

The low elevations of the plantations add to the tea’s uniqueness. Despite its reputation as a tea-growing area, Sri Lanka’s southern region produces exceptional tea. The soil condition gives the leaves blackness and imparts a clear and distinctive taste to the brew, which can grow from sea level to around 2,000 feet (600 meters) above sea level. 

 

List of tea brokers in Sri Lanka

 

• Ceylon Tea Brokers PLC

Ceylon Tea Brokers PLC is the first stand-alone tea broker company that got the opportunity to be on the list on the Colombo stock exchange. Besides, it is now one of the most well-respected companies in the industry has grown rapidly.

• Forbes And Walker Tea Brokers (PVT) Ltd

James Forbes and Chapman Walker formed Forbes And Walker Tea Brokers (PVT) Ltd in 1881. Also, it was handed to senior Sri Lankan employees for ownership and management. The first Sri Lankan chairperson was Mr. R.S. Wijesekara.

• Mercantile Produce Brokers (PVT) Ltd

Since 1983, Mercantile Produce Brokers (PVT) Ltd is a tea broker company that has grown considerably through connecting high-quality Ceylon tea producers with potential buyers in the region. Also, the company provides a variety of services including ensuring the quality of tea, bidding for the best price, adhering to sound financial policies, and maintaining the traditions of tea brokers.

• Eastern Brokers Limited 

Mr. Ajit Chitty is the company’s founder of Eastern Brokers Limited as a tea and produces brokering company. Also, the company was specifically known as Eastern Brokers Limited because the majority of tea broking firms at the time were British and of western origin.

 

• Lanka Commodity Brokers Ltd

The company was established in 2003 with main sale high and medium section 13% of market shares. Moreover, the company holds expertise in tea manufacturing and provides advice. 

 

FAQs

 

What is silver tip tea?

 

Tea tips, also known as “golden tips” or “silver tips,” are the thin, unopened leaves of the tea plant. Chinese tea farmers discover the tea tips as to be the sweetest part of the tealeaf. The tea plants store all of the nutrients over the winter, and the nutrients are pushed out in the first tea tips in the spring. The word “tippy” refers to tea that has many tips. Moreover, some teas are completely made of tips.

 

What is BOPF TEA?

 

One of the most popular ratings in Sri Lanka is “Broken Orange Pekoe Fanning,” or BOPF. The leaves of this fine Ceylon tea are neat, clean, and thin. Smaller than BOP leaves, marginally larger than dust, and produces a solid brew. BOPF is typically used to make a fine cup of tea without milk or sugar.

 

How Sri Lanka tea auction going on/ how to participate Colombo tea auction online platform

 

The tea auction, which is conducted in Colombo, is a massive tea auction around the world. Moreover, it will be held in Colombo every Tuesday we well as Wednesday. However, during the New Year festival and Christmas season, the auction will not be continued. Recently the auction now went to an online platform as a precaution for the pandemic. 

 

How do I participate in a tea auction?

 

Simply buyers and tea brokers can visit the Ceylon chamber of commerce on Wednesday or Tuesday. However, due to the impact of Covid-19, the auction is transformed into an electronic auction. On the fourth of April the Colombo, tea-trading association held the first electronic auction.

 

How do you buy tea at an auction?

 

First, get an application form from the Colombo tea board website. After registering with the Sri Lanka tea board, you can participate in the auction. Tea brokers will conclude the prices of tea based on the variety of them such as high and medium, low grown semi leafy, tippy, tea dust. Then buyers can bid for tea to buy them.