Tuesday May 19, 2026
Tuesday May 19, 2026
Tuesday, 19 May 2026 02:13 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
 |
| Plantation and Community Infrastructure Minister Samantha Vidyarathna |
The Government yesterday announced an additional Rs. 2.5 billion fertiliser subsidy package for tea smallholders and growers as rising geopolitical tensions in the Gulf region continue to pressure Sri Lanka’s tea industry through higher energy, fertiliser and production costs.
Plantation and Community Infrastructure Minister Samantha Vidyarathna, addressing the media yesterday, said the decision was taken as an emergency relief measure to cushion growers from mounting global cost pressures and climate-related disruptions affecting production.
He noted that under normal circumstances the Government provides fertiliser assistance only once a year.
However, given the current challenges, authorities have decided to offer a second round of support as any loss of export crop production could have an adverse impact on the economy.
“Usually, the Government only provides a fertiliser allowance once. But given the unprecedented situation, we have decided to extend another round,” Vidyarathna said.
According to the Minister, the annual fertiliser allowance currently stands at Rs. 4,000, for which the Treasury allocates around Rs. 2 billion. Under the newly approved second round, growers will receive Rs. 5,000, with an additional Treasury allocation of Rs. 2.5 billion.
Vidyarathna acknowledged that Sri Lanka’s tea crop and exports suffered a setback during the first quarter of 2026 due to adverse weather conditions and the ongoing instability in Middle Eastern countries since the beginning of March, which remain a critical market for Ceylon Tea exports.
During the first quarter of 2026, Sri Lanka’s tea export earnings fell 5.22% year-on-year (YoY) to $ 351.58 million. In March alone, tea export revenue dropped 17.34% to $ 114.57 million, down from $ 138.83 million recorded a year earlier.
Around 45% of Sri Lanka’s annual tea exports, equivalent to nearly $ 680 million out of the industry’s total $ 1.5 billion export revenue, are generated from Middle Eastern markets including Iran, Iraq, United Arab Emirates and Saudi Arabia, making the sector particularly vulnerable to regional instability.
Despite recent challenges, the Minister said there were signs of improvement in market conditions. Excess tea crop volumes at the weekly Colombo Tea Auction had increased to 16.19% two weeks ago from the usual level of below 14%, but have since improved to near 10%.
“Similarly, auction prices, which had fallen to Rs. 1,135.59 per kilogram two weeks ago, recovered sharply to Rs. 2,220 per kilogram last week,” he added.
Official industry data shows total tea production declined by 2.55 million kilograms (Mn/Kgs) in the first quarter, falling from 62.16 Mn/Kgs in 2025 to 59.61 Mn/Kgs in 2026.
Tea export volumes also dropped by 2.85 Mn/Kgs to 60.36 Mn/Kgs from 63.21 Mn/Kgs recorded in the corresponding period last year. However, export earnings remained relatively stable at Rs. 109.09 billion compared to Rs. 109.90 billion in 2025, supported by an increase in average FOB prices to Rs. 1,807.27 per kilogram from Rs. 1,738.80.
The National Sale Average at the Colombo Tea Auction meanwhile declined by Rs. 26.07 per kilogram to Rs. 1,153.25 from Rs. 1,179.32 last year.
Vidyarathna said the Government is working on contingency plans to deal with any potential future shocks stemming from global economic uncertainty and climate change, while setting an ambitious target of increasing Sri Lanka’s tea export earnings to $ 2.5 billion and annual production to 400 Mn/Kgs by 2030.
The Minister also acknowledged concerns raised by tea exporters regarding delays in receiving SVAT refunds within the stipulated 45-day period and confirmed that discussions with the Finance Ministry are scheduled to address the issue.
‘Ceylon Tea Walk’ to mark International Tea Day
Sri Lanka will mark International Tea Day on Thursday (21) with a special public walk titled the Ceylon Tea Walk, as the country also celebrates the 50th anniversary of the Sri Lanka Tea Board.
Plantation and Community Infrastructure Minister Samantha Vidyarathna announced that the walk will commence at 9:30 a.m. from the Sri Lanka Tea Board premises and proceed to Galle Face Green.
Speaking on the upcoming celebrations, Vidyarathna said this year’s event carries added significance as the Sri Lanka Tea Board marks five decades of service to one of the country’s most important export industries.
He noted that International Tea Day recognises one of the world’s most widely consumed beverages, while also highlighting the livelihoods of millions of tea growers and workers, particularly smallholder producers who form the backbone of the global tea industry.
This year’s celebrations will be held under the theme “Fostering Growth and Inclusion,” focusing on culture, sustainability, and the livelihoods supported by the tea sector.
The Minister said tea remains deeply connected to traditions and communities across the world, and particularly in Sri Lanka, where Ceylon Tea has become an internationally recognised brand and a key contributor to the national economy through foreign exchange earnings.
He also invited all industry stakeholders, tea growers, exporters, workers, and consumers to participate in the celebrations.
International Tea Day is a global observance led by the Food and Agriculture Organisation (FAO) aimed at promoting sustainable tea production, supporting tea farmers and workers, encouraging fair trade practices, and celebrating tea’s cultural heritage worldwide.
