market imposed requirements for export of tea and

M T Z M CIC Tea Advisory Services (Pvt) Ltd.

Market imposed requirements for export of tea

and its implications on the tea

industry in Sri Lanka

Dr M T Ziyad Mohamed Director CIC Tea Advisory Services (Pvt) Ltd., 205 1/1 D R Wijewardene Mawatha, Colombo 10, Sri Lanka e mail: [email protected]


Market imposed requirements

1. ISO 3720 - Minimum Quality Standard

2. Food Safety Management Systems (FSMS):

- HACCP (Hazard Analysis and Critical Control Points)

- ISO 22000 : 2005

- Eurep GAP

3. ISO 9001:2000 – Quality Management System


4. ISO 14000– Environmental Management

Systems

5. Maximum Residue Levels (MRLs) of Pesticides – Becoming a non-tariff trade barrier??

6. Corporate Social Responsibility (CSR) Certification

- Ethical Tea Partnership (ETP)

- Fair Trade Labeling (FLO)

(OHSMS- Occupational Health and Safety Management Systems)


ISO 3720

• Water extract - 32 % (w/w) (minimum)

• Total ash - 4 % (minimum)

- 8 % (maximum)• Alkalinity of water soluble ash - 1- 3 %

• Crude fibre content - 16.5% (maximum) • Acid insoluble ash - 1.0 % (maximum)

SL strictly follows/adheres to this standard


Food Safety Management Systems (FSMS) –

HACCP/ISO 22000:2005/Eurep GAP….

- Ensures that the product is free!! of - physical, - chemical (eg: pesticides)

(No additives in processing!!!) - biological contaminants…

- Could be achieved by following GAP + GMP

- Encouraged/Very useful - ensures safety of the product - About 48 factories in SL had achieved certification- Almost every other factory had initiated action

towards achieving FSMS certification


ISO 9001:2000 QMS

- Initially ISO 9002:1994 was demanded

- Although this standard had fair amount of benefits, it did not guarantee the product quality!!

Not very useful?- Factories ISO 9002 certified, but poor prices for tea

- Too much of documentation(!) and staff did not have the time to supervise processing…??

- Role of consultants……made it worse…

- Consistency in processing but not on quality of the final product


Why? – i. The raw material is “non-homogenous” and

ii. The process is not automated (not continuous)!!

Non homogeneous raw material (i.e leaf standard):

Leaf standard – vary from 70 – 95% (on weight basis)

VP leaf/Seedling leaf – wither and ferment at different rates

VP leaf from different cultivars (30 – 40 cultivars in SL) ….

Chemical composition of the leaf varies, depending on the planting material, soil type and climatic conditions..

Leaf from different times of the pruning cycle..

Leaf standard from different small holders…vary


- ISO 9001:2000 would be very advantageous, if the raw material is uniform

- Uniform raw material + consistent process

consistent final product

Solution:Solution: – – improve the leaf standard to make it 95% - improve the leaf standard to make it 95% - 100%?100%?

Practicability?: Practicability?:

– – for an industry already saddled with the highest for an industry already saddled with the highest COP..COP..

ISO 9001:2000 – ISO 9001:2000 – demands continual improvements demands continual improvements – –

demonstration/documentary demonstration/documentary evidence?evidence?


ISO 14000 – Environmental Management Standards

(ISO 14001, 14010, 14011….19011 etc.)

• Tea cultivation – although agrochemicals are used, by following GAP, requirements could be easily met

• Tea processing – no additives added no hazardous wastes released

By following GMP, requirements could be easily met

No difficulties in achieving ISO 14000 certification

Documentation is crucial…..


MRLs of Pesticides

- SL tea enjoys a strong position –declared as one of the cleanest, as far as

pesticide residues are concerned

- 66% of the production, by nearly 397,000 smallholders

Under different eco system hardly any pesticides used.. only

herbicides!

- 34% of the production, by the corporate sector

- Exports: EU : 30 million kg, Japan : 9 – 10 million kgNorth America : 4 – 5 million kg

(accounting to nearly 15% of the export)


Issues related to MRLs of pesticides:

- Perennial crop and not a seasonal crop- Perennial crop and not a seasonal crop

If seasonal, application of pesticides could be If seasonal, application of pesticides could be restrictedrestricted

- Vegetative part is harvested and not the nut - Vegetative part is harvested and not the nut (coconut) (coconut) or the latex (rubber) or the latex (rubber)

to control certain leaf pests, pesticides need to to control certain leaf pests, pesticides need to be be sprayed on the leaf (harvested)sprayed on the leaf (harvested)

- Harvesting interval of only 5 – 14 days..- Harvesting interval of only 5 – 14 days..

- Efforts to set harmonized MRLs in different consuming countries, had failed!!.


Negligible quantity is exported as straight line teas Negligible quantity is exported as straight line teas or single estate teas!!or single estate teas!!

Individual producer does not know, where his tea Individual producer does not know, where his tea is going to end up!!is going to end up!!

Satisfy requirements set out by each segment Satisfy requirements set out by each segment – – additional cost – at what benefit?additional cost – at what benefit?

Can there be, a common list of pesticides – (TASL Can there be, a common list of pesticides – (TASL List)List)

- Certification would involve huge analytical costs;Certification would involve huge analytical costs;- Sufficient? time gap for analysis, between Sufficient? time gap for analysis, between purchasing purchasing and export and export

Can the tea industry, move away from using Can the tea industry, move away from using pesticides?pesticides?


Options available:

i. Organic tea – low productivity and higher COP?? (There are 10 factories producing organic tea/bio-tea)

ii. Biological control of pests, diseases and weeds

- Classical biological control.No major issues, but ensure that the

predator does not become a pest for some other crops

- Biological control methods using fungi formulations

- mode of action is important

- if not, there could be claims of residues…


Type of Processing

Considered as the major bottleneck towards certification

SL Production: > 95% orthodox; < 5% CTC

- CTC type of processing (continuous process) - Homogenization through maceration

- documentation as well as implementation is straight forward and the impact might not be felt

- Orthodox type processing (batch process)- producing about 16 - 22 grades, classified under three

groups - grading/sifting operation, lasting about 2-3 days - documentation as well as implementation is

extremely difficult


CSR – Corporate Social Responsibility:

Ensure social and ethical conditions are met (right through the supply chain):

i. Towards the business itself, in order to sustain the industry - Through optimum investment, inputs etc., towards maintaining productivity of the plantations, while preserving the environment etc.(eg: Soil conservation measures by planting vetivar grass)

ii. Towards employees – more emphasis

No exploitation of work force – affordable wages, decent living conditions, healthcare, no child labor..

Highly encouraged and practiced - could expect more commitment improved productivity


CSR - Met to a great extent -(Guaranteed employment after 18 years of age, positive approaches towards healthcare, children’s education,

housing (even after retirement) and sanitation facilities).

- Continuing/striving to expand / improve.

- With support from the state, NGOs & INGOs

- Industry is mindful of the return on investment related to CSR practices

• Fair Trade Labeling (FLO certification) – Somewhat positive response from the producers

• Ethical Tea Partnership (ETP)– Reservations from the producers


Fair Trade Labeling (FLO certification):

(+) - incentive (US $ 0.50 – 1.00/kg?) to be used towards welfare of the employees –

i.e health, education, housing and sanitation facilities

Issues (-) High certification fees &

(-) Tough FLO generic standards for hired labour

(-) The tea produced/sold is blended with other teas & not many producers know, who the ultimate

buyer/ consumer is

Difficulties in claiming incentives!!!


• Ethical Tea Partnership:

- No direct incentives, although ETP certified tea may be preferred in certain destinations

- Country to country (producer), requirements do differ (based on country specific laws/

regulations)

- Taking the above reservations, the conditions/ requirements are revised and piloted in Kenya!!


Issues• Tougher certification requirements, compared to other

food products (non tariff barriers..)• Non-homogenous raw material• Type of processing – batch process • Being a perennial crop • Harvesting the vegetative part, • Costs involved in

a) upgrading the processing units

b) certification

c) Third party auditing (ETP, FLO..)

(COP is the highest in SL, about US $ 1.7 – 2.2/kg)


• Producers not knowing the ultimate consumer (difficulties in claiming incentives and additional costs involved, in satisfying requirements set by all buyers)

Higher COP, without much return on investment

• Negligible quantity sold as direct sales blending

i. Each component of the blend should conform

ii. Operations at blending plants and warehouses too need to be certified

(Major warehouses and blending plants are HACCP/ ISO 22000 certified)


Challenge/s faced

• Conform to those standards, to stay in business

• Initiatives taken by the industry - being pro-active

(CQC, TASL standards…)

• In case of difficulties, with regard to meeting the requirements, request for concessions through strong/sound arguments/ representations

(eg: making representations to FAO/WTO etc.)


Thank you

market imposed requirements for export of tea and

Documents

factories iso

qmsinitially iso

e leaf standard

sl tea

cic tea advisory services

tea industry

different ratesvp leaf

export of tea