Sri Lanka’s tea export sector is facing mounting logistical and market challenges as the Gulf conflict disrupts trade flows, raising questions about the accuracy of official reassurances. Comments by Mangala Wijesinghe highlight the widening scope of the crisis, extending beyond tea to broader export systems.
A key vulnerability lies in Sri Lanka’s reliance on the Middle East, which accounts for roughly 35–52% of tea demand depending on the measure used. In 2025, exports of tea to the region were valued at approximately $550–$600 million, forming a critical pillar of the country’s total tea export earnings.
Wijesinghe pointed out that disruptions are not limited to demand but also affect logistics infrastructure. Dubai, a major transit hub for Sri Lankan exports, has been impacted by regional instability, including tensions involving the Islamic Revolutionary Guard Corps. This has complicated shipment flows and increased reliance on alternative, often costlier, routes.
While some exports particularly perishable goodshave shifted to air freight, this is not a viable large-scale solution for tea due to cost constraints. Instead, exporters are forced to absorb rising shipping expenses and navigate unpredictable delivery timelines.
The Tea Board’s assertion that losses cannot yet be estimated contrasts with broader trade data. Given Sri Lanka’s average monthly tea export revenue of around $100–110 million, even partial disruptions could lead to weekly losses in the range of $8–12 million. This suggests that the widely reported figures, though debated, are not implausible.
Furthermore, inconsistencies emerge in official statistics. Claims that 52% of exports go to the Middle East align with historical trends, but the simultaneous assertion that the region accounts for only 35% of demand indicates a lack of clarity in measurement—whether by volume, value, or market segmentation.
There are also early warning signs within the auction system. While overall demand has held steady, price declines in Iran-focused tea grades and increased unsold quantities reflect weakening buyer participation. These indicators often precede broader market downturns.
The situation underscores a deeper structural issue: Sri Lanka’s heavy dependence on a narrow set of export markets and shipping routes. With both the Strait of Hormuz and Suez Canal under threat, the industry faces a dual shock demand-side contraction and supply-chain disruption.
Ultimately, while officials urge caution in interpreting loss figures, the available data points to a significant and growing impact. Without diversification of markets and logistics strategies, Sri Lanka’s tea industry may face prolonged instability in the months ahead.