SL plantation sector presses forward amidst tightened safety precautions, unprecedented drought 

The Planters’ Association of Ceylon (PA), following the Government declaration of the plantations sector as an essential service, said this week that RPC (regional plantations companies) operations immediately gathered momentum amidst stringent new measures to protect workers and the wider estate community against the COVID-19 pandemic. 

Expressing gratitude to all industry stakeholders and Government authorities for successfully enabling plantation sector to resume critical operations, PA Chairman, Sunil Poholiyadde said in a media release that while work on the estates was halted by March 13, as soon as the COVID pandemic worsened, most RPCs were able to resume work after only 4-days interruption. This was due to the remarkable initiative taken by the RPCs with the assistance of health authorities to institute stringent health and safety protocols, while ensuring that all workers and the wider estate community had their essential needs met, he said. 

“The challenges around COVID-19 add to the already pressing difficulties of tea producers who have been facing an unprecedented drought for the past three months which is estimated to have caused as much as a 40 per cent reduction in estate production. The loss in crop had already created an increase in the cost of production (COP).”

Mr. Poholiyadde also commended the success of each RPC in ensuring that employees were provided with food parcels as well as advances for food and other essentials, as well as special measures taken in partnership with Government authorities. Through such partnerships, rations were delivered directly to the estates, in order to avoid situations where community members would have otherwise been forced to stand in long queues. 

Given the unprecedented global supply chain disruptions unfolding as a result of the pandemic, Sri Lankan tea attracted significantly improved prices by the close of the very first tea e-auction which took place on April 3. Higher prices were primarily a result of lower production, where weekly auction volumes were approximately 40 per cent lower than in a normal cropping month, and sharp currency depreciation. 

However, Mr. Poholiyadde warned that while improved prices would be useful in a crisis situation, currency depreciation also posed a serious challenge for the industry when considering its impact on increasing input costs, which together with lower production volumes – would negatively impact an already high cost of production. 

In the case of the rubber sector, six auctions were delayed for a period of three weeks owing to the COVID-19 pandemic, despite increased production driven by favourable weather conditions in rubber growing regions. Mr. Poholiyadde noted that the interruption in auctions had caused acute difficulties for RPC cashflows. 

“The resumption of auctions has been an extremely welcome development for the rubber sector as well. Prices have remained at relatively similar levels to before the COVID outbreak, however we will need to pay careful attention here given the sharp declines which were seen in global oil prices,” he stated. 

“Despite the challenges, RPCs are fully committed to ensuring the health and safety of its employees. The PA and its members will also be carefully monitoring the situation as it develops, and will be ready to implement any further directives issued by the Government and health authorities on an urgent and immediate basis,” PA Media Spokesperson, Dr. Roshan Rajadurai stated.