The tea on the industry

The COVID-19 pandemic, a restriction on a crucial manufacturing component, and process halts brought on by the economic crisis has not stopped Sri Lanka’s second-largest export sector – the tea industry – from operating in the face of hardship. For instance, a hillside tea farm had to suspend tea sacks from pulley systems along ziplines in order to meet supply deadlines owing to fuel shortages and the resulting transportation problems. 

Major tea exporter Heritage Group Managing Director Anel de Silva, reported that: “Shipments continue globally,” “the weekly tea auctions – changed to an online format – continue to run as usual,” and “the port of Colombo is operating without interruption.” Despite challenges, the sector has persevered in running the supply chain effectively.

A proposal to stop fertiliser and other agricultural chemical imports and instantly switch fields to organic growing methods beginning in May 2021 sparked a boom in the tea industry. In 2020, Sri Lanka spent over $ 400 million importing 1.3 million metric tons of fertiliser. Nevertheless, due to the conflict between Russia and Ukraine, the export of fertiliser was halted in February 2022. 

As a result of the organic agricultural mandate’s failure, Sri Lanka already had insufficient supply. The issue grew worse as a result of a shortage of foreign finance to source this raw material. In accordance with a credit line extended to Sri Lanka, India delivered 44,000 metric tons of urea to that nation in the middle of July.

Despite a shortage of goods locally, demand is strong. Due to their windfall profits from soaring oil prices, consumers in the Middle East are in high demand. Midway through the year, the United Arab Emirates bought 13 million kilograms, while Iraq bought 28 million kilograms. Russian consumers have now returned after leaving the market amid the geopolitical unrest in February. 

Because of a decrease in plucking rounds, less raw materials were getting to the enterprises. As industries are having power issues, they were buying less raw leaves, and these saw 10 to 13 days apart rather than the normal 7 to 8 days. Also, the yield per acre was decreasing as a result of undernutrition, discouragement, or workers’ inability to pay for transportation.

Because leaves must be processed within four hours after being plucked, the quality of the tea decreased at the severity of the crisis. Lack of fuel and absent drivers – who were working elsewhere because they could not afford gas and diesel – made transportation impossible. Instead of making timely deliveries of leaves to the manufacturers, other drivers were entrusted with transporting workers to the fields from pickup places.

So, it is possible that this year’s tea exports will earn more than the 1.3 billion dollars anticipated. That won’t simply assist with paying imports; it will also satisfy foreign lenders that Sri Lanka now warrants a bailout after missing payments on Government debt totalling 51 billion dollars in May. 

Farms and businesses have transformed in response to crisis challenges. Morale is being raised by allowing women to queue up for meals while absence rules are suspended. Producers provide fuel to their transportation companies so that tea will arrive at auction houses on time. As Sri Lanka advances toward a sluggish recovery, it is hoped that the challenges the industry has previously faced will be a thing of the past.