By: Staff Writer
Colombo (LNW): Sri Lanka’s Ceylon tea and cinnamon prices were coming down rapidly making it difficult for tea small holders and cinnamon cultivators to survive in the plantation sector, small plantation owners claimed.
Several tea small holders said the price of a kilo of fresh tea leaf has dropped drastically to Rs 150 at present from the new high of Rs300 a few months ago.
One of the key issues confronting the tea industry is the decline in productivity, notably in tea plantations of such major producers as Kenya, India, and Indonesia.
Before the island nation’s economic crisis, tea exports accounted for US$1.3 billion (€1.27 billion) annually and 5% of all global tea production. But this has now dropped to its lowest level in 23 years.
Sri Lanka produces around 300 million kilograms of tea annually and is predominantly an orthodox tea producer. Indeed, Sri Lanka is the largest supplier of orthodox teas, exporting more than 95% of its production.
Stakeholders insist the country’s emergency has trickled down to job losses and rambling tea estates are already witnessing rising social tensions, as those without work in Colombo return home.
The price of kilo of cinnamon has dropped to Rs 2000 from Rs 500 sometimes back.Sri Lanka has about 35,000 hectares of cinnamon, which are mainly grown in the Galle and Matara districts, with about 60,000 farmers and 300,000 workers earning a living from the labour intensive and low-paid industry.
While Mexico is the main market for Sri Lankan cinnamon, the popular spice is also exported to a range of countries, including the US, Peru, Bolivia, Chile, Guatemala and various European nations. In 2021, Sri Lanka exported 18,813 metric tons of cinnamon, generating export earnings of $US230 million.
Although the price of cinnamon and its related products have increased on domestic and foreign markets, farmers are deprived of the benefits because of the domination of private middlemen traders.
Higher production costs and intensifying competition from Indonesia, China and Vietnam have also pushed the Sri Lankan cinnamon industry, like tea and rubber, into crisis.
