Tea factory owners in dire straits
View(s):The Tea Factory Owners Association has pointed out the grave situation the industry was facing with 62 factories shut down due to a current crisis.
Sri Lanka Tea Factory Owners Association outgoing Chairman Harith Ranasighe speaking at the recently concluded AGM held at the Waters Edge said that as per Colombo Tea Brokers Association data, there were 707 factories in operation in 2018. Out of which, approximately 62 factories have ceased to operate as at to date.
The main factor is lower auction prices, he said noting that from 2018, up to now, the national average dropped by Rs. 146 within a span of 16 months and drop in production levels well below the record crop of 338 million achieved in 2014.
Thirdly, industry malpractices and indiscipline amongst most stakeholders, including some factory owners must have contributed to this huge downturn, he explained.
Mr. Ranasinghe pointed out that due to the current crisis, “some factories operate only 2 or 3 days per week. Some are servicing only the bought leaf suppliers and not the debt repayments. Often, leaf payments are delayed and there are unpaid green leaf payments, unpaid bank loans and loss of employment etc”.
The monthly yields of tea smallholders are often not more than 300 kg green leaf per acre. That is similar to the national yield of 1,950 kg per hectare. In this respect, if a smallholder cannot produce at least 600 kg of green leaf per acre, it is not sustainable at all.
Mr. Ranasinghe also said the shortage of fertilizer will seriously impact on the livelihood of the people engaged in the smallholder tea sector. The shortages are already being felt and change of policy at a time of election is remote, he said.