Tea factories closing amidst crashing tea prices
The crash in tea prices at the Colombo Tea Auctions has become a major issue with some tea factories even closing down with an urgent need by the Government to initiate corrective measures to combat this crisis, warned Gaya Samarasekera, outgoing Chairman Sri Lanka Tea Factory Owners Association (SLTFOA) speaking at the 24th AGM of the association held last week at Waters Edge, Battaramulla.
He said the crisis has developed since around two years due to several reasons like the declining oil prices, trade sanctions in some key markets such as Iran, Russia and Ukraine and suggested that one way of averting this situation is for the Tea Board to purchase at the Colombo Tea Auctions around 2.2 million kg at the rate of Rs 430 per kg that would cost around Rs. 985 million.
Earlier in 2009 when the industry was hit due to the Iraqi crisis the Government provided a grant and the SLTFOA urged a similar concession. Further, Mr. Samarasekera pointed out that there was a haphazard way of constructing tea factories without considering the availability of green leaf which caused unfair completion and he thus requested the authorities to stop such construction at least for three years.
He expressed his displeasure as Sri Lanka yields the lowest per hectare in the world which spirals the cost of production to the highest when compared to world’s leading tea producers such as India, China and Kenya which might pave the way for the lesser producing countries like Vietnam and Indonesia to overtake Sri Lanka. Poor replanting and lack of extension services to small tea cultivators too could be attributed to the declining yields, he assessed.
He pointed out the vital importance of establishing a Presidential Task Force to ascertain sustainability of the tea industry and to formulate a national policy framework to develop and sustain the industry In this exercise, he indicated that the private factories and regional plantation companies should work in together to draw a viable strategy.
Though Sri Lanka would be worst affected due to the global situation, he said as in the past, this industry has been resilient in overcoming such situations. He said that solution to the Iranian crisis is within sight and hoped exports to this market would resume soon. At this AGM Anil Perera was unanimously elected as the new President. Naveen Dissanayake, Minister of Plantation Industries was the Chief Guest.