Ceylon Tea fights its own battles
Ceylon Tea is now in the Dimbula season and the concerns are grave as the industry fights against a high cost of production and comparatively the prices are marginally higher than last year.
The cost of production of Ceylon Tea has increased from Rs.150 -175 with the labour cost accounting for 70 per cent of the total cost, Planters Association Spokesman Dr. Roshan Rajadurai told the Business Times.
He noted that with electricity, fuel and all other input material including internal transport increasing in costs this is adding to the growing concerns regarding the lack of adequate fertiliser and the continued ban on glyphosate.
“We gave 35 per cent wage increase, transport cost has gone up with the increase in petrol and diesel and we don’t have any fertiliser and no fungicide and pesticides,” Dr. Rajadurai explained adding that the industry “will cope as much as we can.”
The accrued stocks of glyphosate from the Ceylon Petroleum Corporation (CPC) have not been received since the ban came into effect from April 2021, he pointed out.
With rains slowing down, weeds have taken cover of the grounds as a result of which they expect a crop loss of 20 per cent due to overgrowth. He also pointed out that this will cause issues to workers who would not be concerned about going onto the estates.
“Our biggest issue is that the government mandated wages board for a 35 per cent wage increase and naturally the costs have gone up but the prices increased only by Rs.6,” he noted.
The increase in the yields last year was due to adequate rains but Dr. Rajadurai pointed out noting however, that had the fertiliser and fungicide ban not come into play the industry could have generated a higher yield.
At the dollar prices at the auction, the national average by end November was US$3.13 but last year it was US$3.42 and in 2018 the figure was US$4.11. In 2010 the national average was at US$3.28 and after 12 years we are at US$3.13, he said.
The Iran Sri Lanka tea for oil deal is taking hold as brokers point out there is much activity at the auctions for tippy leaf categories. Iran unlike other countries buys higher quality teas and their impact is quite significant on the low country market.
However, it has been found that there is a slow but steady uptake of fertiliser by smallholders and that is likely to benefit the crop.
“We are seeing improved tea crop coming in the last couple of weeks and we will see improved supply going into February as well,” Asia Siyaka Commodities CEO Anil Cooke said.
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