Lankan tea industry warns against unreasonable wage hikes

Sri Lanka’s Regional Plantation Companies (RPCs) on Thursday warned of “dire consequences” to the plantation industry if a reasonable solution to the wage issue is not worked out.
The Tea Planters Association (PA) in a media release pointed out that wages if increased to Rs.1000 could result in production costs skyrocketing by Rs.162.24 and becoming increasingly non-competitive in the global market.
“It is indeed extremely difficult to understand the position of the unions in continuing to unreasonable and impractical demand for an unconditional 45 per cent wage increase in the estate sector daily wage during a time when the industry is in its worst crisis where the companies are borrowing a colossal amount of money from the banks to pay the current labour wages,” PA Chairman Roshan Rajadurai said in the statement.
Since the main average price at the Colombo Tea Auction in the last week of November only amounted to Rs. 409, the loss from a single kg of tea produced by RPCs would increase from around Rs. 50 to Rs. 70 at present to over Rs. 200, making operations completely financially and economically unviable and impossible.  Added to this, a high percentage of the tea remains unsold at the auction and the tea trade indicated that there is a serious drop in the orders for tea in the forthcoming quarter too.  (SD)