Debts mount as Lankan tea crisis worsens
View(s):The Planters’ Association (PA), concerned that Sri Lanka’s tea sector is losing its allure to the authorities – then and now -, says a combination of crises including demands for a higher wage, collapse in 75 per cent of the tea source markets and a large quantum of unsold teas is putting the industry on a road of no return.
“We have been appealing to the Government to provide us some relief against high wages and low tea prices but nothing is happening,” PA President Roshan Rajadurai lamented to reporters this week in Colombo, adding: “We have (now) asked the government for low interest, long term loans as banks have stopped lending (to us).”
Losses at regional plantation companies, which the PA represents, totalled Rs 3.4 billion last year owing to falling tea and rubber prices, which has worsened this year.
Adding to their woes is the annual collective agreement negotiations on wages which have been going on with trade unions since March. The PA presented a productivity-linked wage hike proposal which the unions are studying but concedes that there is a stalemate in the discussions. “We can’t afford to increase wages,” he said, noting that with elections round the corner unions are also under pressure to get a reasonable wage hike for workers.Tea prices have fallen by Rs. 100 per kg since the beginning of the year while falling oil prices have drastically cut demand from West Asia. On top of that crisis-hit Russia and Ukraine have reduced purchases while the quantity of unsold teas is rising at the auction.