‘Declining yields making Sri Lanka a loser in global tea sector’


By Hiran H.Senewiratne

Sri Lanka is losing its competitive edge in the global tea sector due to increased production costs and also a decline in the tea yield owing to dropping fertility levels in the local soil due to excessive use of chemical fertilizer, Immediate Past President, Tea Exporters Association Rohan Fernando said.

"Besides those issues, the local tea export sector is now going through a major crisis due to the economic slow down in Russia, the Middle Eastern crisis, Iran trade embargoes and other global factors adding insult to the injury, Fernando said at a media conference last Friday at Cinnamon Grand Hotel.

He said that due to the increasing cost of production, Sri Lanka is losing its global competitiveness and is also likely to lose its market share in the future. Therefore, a proper economic model is the need of the hour to face future challenges for the industry.

Fernando said that the recent Rs 700 wage increase for tea industry workers by the Regional Plantation Companies is not sustainable for the industry and it accounts for 70 percent of the cost component, which puts the industry into hard times.

Fernando also said that 100 percent of the tea plantations depend on the natural weather patterns, therefore, to promote Sri Lanka as a tea hub Sri Lanka needs to import tea for re-export in the future.

Further, the tea industry being one of the most valued economic contributors to the country, it expects to achieve an estimated revenue of US $ 1.3 billion by the end of this year with an estimated export volume of 289 million kilograms.

" This indicates a drop in terms of revenue and volume as the industry concluded the year 2014 with a revenue of US $ 1.6 billion through an export volume of 320 million kilos, he said.

The reduction in the tea crop has been identified as the major contributing component for the diminution in export volumes, which have been severely impacted by factors, such as, the prevailing drought, restriction of fertilizer due to reduction in the government subsidy, he said.

"On a global scale, the tea industry has seen growth in production during the last ten years by nearly 47 percent, while Sir Lanka has grown by five percent only, he said.

"Low productivity, inadequate re-planting and old plantations etc are some of the other contributory factors for the low tea crop in Sri Lanka, Fernando added.

animated gif
Processing Request
Please Wait...