Industry standards are also improving with more and more tea factories and estates acquiring international certification.

Sri Lanka has become the third largest tea exporting country and the fourth largest tea producer in the world, say officials.

Addressing a recent conference in Colombo, Plantation Industries Minister Mahinda Samarasinghe said an important threshold would be registered in local output this year, coinciding with the 145th anniversary of the commercial tea industry.

He said the local tea industry had achieved significant gains in recent years.

The Minister said it is the objective of the government to re-acquire the position of the leading tea exporter in the world, which Sri Lanka held in the year 2006.

Tea Research Institute Chairman Gerry Jayawardena said Sri Lanka is testing new varieties of tea that have better ability to tolerate drought and disease.

Jayawardena said new types of tea plants are were required to cater to consumer preferences for food grown without use of chemicals and to adopt for climate changes.

He said the Tea Research Institute is to release new varieties over the next two years.

He said the new varieties are now being tested with small holders and regional plantations companies. They offer a higher yield and have a better ability to tolerate drought, disease and pests.

Sri Lanka’s economic expansion has rebounded since the end of a 26-year ethnic conflict in May 2009, boosted by the development of roads and ports, tourism, foreign investment and consumer demand.

The government expects foreign investment inflows to reach $25 billion this year.

The rapidly developing Northern Province following the restoration of peace in the region has also become a springboard for local and foreign investors seeking investment opportunities in Sri Lanka.

The government is spending about $1 billion a year to rebuild the North and has launched an ambitious reconciliation program to build national unity.

Economic Development Minister Basil Rajapaksa said recently that a study by the International Monetary Fund had predicted that Sri Lanka would remain as the second best performing economy in the world next year, after China.

The minister pointed out that Vietnam, Germany, Japan and South Korea took many years to return to normalcy after conflicts while Sri Lanka, just two years after the war, was able to be among the top four economies in the world with an economic growth rate of around 8.3 percent.

He said the last budget provided many incentives to investors to start businesses in cement, steel, iron, manufacture of drugs and other similar ventures in order to bridge the export and import gap which is in existence due to dependency on essential items that could be manufactured in Sri Lanka.

Export Development Board (EDB) Chairman Janaka Ratnayake, meanwhile, said Sri Lanka’s exports had shown considerable resilience after dipping in 2009.

Sri Lanka earned from $11 billion from its exports, representing a growth of over 20 percent from 2010 despite a slowdown in the world economy.

Commenting on the prospects for this year, the chairman said the EDB expects the growth momentum to continue despite a challenging environment.

In 2010, Sri Lanka’s exports increased by 21 percent to $8.5 billion and the performance in 2011 were exceptional as it exceeded their targets as well as projections.

Ratnayke said policies enunciated in the “Mahinda Chintana 2010 — The Vision for the Future” as well as follow up stimuli from the 2010 Budget helped to increase in this performance.

He said exports also played its part in helping the country to achieve 8 percent economic growth for the second consecutive year.

As per the latest end-November performance data released by the Central Bank last week an export growth of 22.2 percent to $ 9.58 billion has been achieved.

Ratnayake said the 2011 growth is also significant.

He said apparel exports remained robust recording a 25 percent growth to $ 3.8 billion by the end of November despite economic uncertainties in the West.

Ratnayake said the EDB is the apex body responsible for the development of exports and has adopted a strategic approach to promote exports during the next five-year period.

He said diversification of export products and markets, value addition, brand promotion, productivity improvement, product adaptation, market communication and market development are the main components of the strategic plan.

Recent data showed that Sri Lankan inflation slowed in January to a 26-month low, giving the Central Bank scope to shield economic growth by leaving interest rates unchanged.

Consumer prices in Colombo increased 3.8 percent from a year earlier after gaining 4.9 percent in December, the Department of Census and Statistics said on its website.

Sri Lanka has left interest rates unchanged since the beginning of February last year to aid domestic spending and devalued its currency in November to boost exports.

Demand for credit has curbed scope to lower borrowing costs, Central Bank Gov. Ajith Nivard Cabraal said recently.

The $50 billion economy can achieve 8 percent growth in 2012, he pointed out.

Sri Lanka’s 3 percent rupee depreciation was a one-off move, Cabraal said.

Inflation will probably remain around the “mid-single digit” level in 2012, the central bank said recently.

Inflation slowed as the Exporters Association of Sri Lanka (EASL) pushed for the integration of Sri Lanka’s economy with the global economy by promoting, financing and facilitating international trade and investment.

In addition to the existing trading models, channels and traditional banking sectors with bank loans as the main source of funding, a whole gamut of innovative enabling infrastructures such as corporate bonds, debt markets, financial instruments and commodity futures would enhance exporter performance, enabling easy access to often cheaper and more competitive trading and financing options, said EASL Immediate Past President Nirmali Samaratunga.

“With Asia emerging as the economic powerhouse of the future, Sri Lankan exports need to target the region and focus on greater regional trade to achieve higher growth,” she told a recent forum.

This would involve expanding Sri Lanka’s trade through both bilateral and multi lateral agreements.

“We also highlight the paramount importance to encourage the private sector to explore and harness potential in the newly liberated areas in the Northern and the Eastern province, as this would lead not only to enhancing our export base and supply capacity, particularly in agricultural products and fisheries, but more importantly, such links would enable speedier economic development of these areas leading to sustainable peace and prosperity,” Samaratunga added.