After its attempt to become totally organic in the tea sector backfired, Sri Lanka is now focussing on improving production, aided by a favourable weather conditions and intensified fertiliser application.

“We are hopeful that the second half of the year should see an improvement in production with fertilisers being applied. The weather, too, has been conducive to growth. These, coupled with promotional efforts, should help Sri Lanka hold on to its position in the global market,” Niraj De Mel, Chairman, Sri Lanka Tea Board, told BusinessLine in an interaction.

To raise production, he said, apart from continuing replanting activities, fertiliser application will be increased to catch up on what was missed in the previous year. Lifting of the fertiliser ban in the country a few months ago has resulted in its increased use. At the same time, plantations have managed to capitalise on the good rains in April and May, he said.

Business as usual

On current developments in Colombo hitting business, De Mel said it was mainly confined to the city area and plantations were miles away. Even the entrance to the port in Colombo is at least 10 km away from the city centre. Production amidst challenges continues, tea auctions are taking place and tea exporter activities continue. Unless there is a strict island-wide curfew or forced lockdown/ disruption, it will be business as usual.

On the impact of power cuts and the fuel price rise on tea production, De Mel said these have certainly affected the tea industry. However, the industry is classified as an essential service and has enabled the continuation of manufacturing activities.

To a question on the impact of fuel shortages to export shipments, he said exports predominantly are carried out by exporters, not so much the plantations. Tea purchases from the weekly auctions, which have continued uninterrupted, helped sustain exports. “Tea exporters have agreed to pay in US dollars for the fuel to be supplied to factory owners. This would address their issues to a great extent,” he said.

“Sri Lanka in recent years has been the third largest supplier of tea to the world. I do not think there will be any shift to this position,” he said when asked about steps taken by the industry to regain its position in the tea export market.

However, he said tea production in the first five months recorded a 17 per cent drop, whilst exports were 7.5 per cent lower than in the same period in 2021. Production during January-May 2022 was 112.6 million kg and exports 110 million kg.

Rising inflation is a concern, but plantation firms are working to ensure that tea workers in the large gardens are not affected by inflationary pressures. Likewise, private tea factory owners are looking after the tea smallholders. These efforts have helped to sustain this segment of the value chain, he said.

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