Indonesia, the world’s seventh largest tea producer, plans to upgrade
the standard of tea and tea products produced locally as well as sourced
overseas.
Deputy Trade Minister Bayu Krisnamurthi said on
Wednesday that new developments in the industry, which demanded improved
qualities of raw material for both local consumption and exports, would
be accommodated by measures supported by the National Indonesian
Standards (SNI).
Higher standards would open up more
opportunities for plantations, outside those owned by state plantation
companies (PTPN), to join auctions for major buyers.
“Our key
concern is to enhance competitiveness, to increase added-value in our
production chain and to further develop the flagship commodity,” he
said.
The government’s standards for tea set the maximum limit
of pesticide residue. The limit will be raised under the planned new
standard.
Indonesia, once the world’s fifth largest producer,
suffered a decline in tea production due to shrinking tea plantations as
farmers prefer more lucrative commodities.
Tea plantations have
dropped by 3,000 hectares per year to 123,351 hectares in 2011. The tea
plantation business has also become less attractive due to the low
added-value for investors.
Bayu said that in line with the push
to improve standards, the government also planned to differentiate
import duty for unprocessed tea and finished products to help protect
local growers and industries.
“We want to facilitate easy access
to raw materials and semi-finished products to inject growth in the
local industry,” Bayu said while acknowledging that imports were
inevitable as imported varieties were used for blending. Indonesia
imports tea for blending sourced primarily from India, Kenya and Sri
Lanka.
Indonesia has imposed a 5-percent import duty on tea but
has lifted it to zero percent for Southeast Asian countries under the
ASEAN free trade agreement.
The tariff is still relatively low
compared to other countries, such as Sri Lanka and China who impose up
to 30 percent duties. The World Trade Organization allows import duty up
to 40 percent.
In 2011, Indonesia imported 20,000 tons of tea.
During the same year, Indonesia produced 123,700 tons of tea, with
around 75,000 tons exported.
Secretary for the Indonesian Tea
Council Harry Hendrarto welcomed the government’s plan to upgrade tea
SNI, but warned that the move should be accompanied by measures to
support local planters.
“Otherwise, the policy will severely
hurt local growers and business as some of them will face difficulties
in meeting the standards,”he said.
— Linda Yulisman
Source : The Jakarta Post
