By: Staff Writer
May 27, Colombo (LNW): At a time when Sri Lanka’s tea exports are enjoying a significant boost in earnings, a crisis is unfolding in the low-grown tea sector. A severe shortage of tea leaves—largely stemming from a mismanaged shift to organic fertilizers during previous administrations—is causing widespread closures of tea factories, threatening the sustainability of this crucial industry.
In April 2025, export revenue from tea rose by 12.45% year-on-year to $107.34 million, making up 12% of the country’s total merchandise exports. This growth was mainly driven by a 27.6% rise in the export of tea packets.
Additionally, tea export volumes climbed 11.17% compared to April 2024. Significant gains were recorded in key markets, with tea exports to Iraq up by 46.7%, Libya by 292.3%, and Iran by 115.96%.
Despite this encouraging export performance, the domestic production side tells a starkly different story. Nimal Udugampola, Chairman of the Tea Small Holdings Development Authority, revealed that 225 tea factories have shut down across the island so far.
According to him, the closures are primarily due to the sharp decline in tea leaf supply, both in quantity and quality. He pointed to the ongoing leaf shortage as a major impediment to the industry’s operations and long-term sustainability.
Udugampola also highlighted the unrealistic production target of 174 million kilograms of made tea by 2030. He noted that Sri Lanka has never reached such volumes in its 157-year tea industry history. The highest recorded annual production was only 134 million kilograms in 2013.
However, the numbers presented by Udugampola were met with some skepticism. Tea Commissioner of the Sri Lanka Tea Board, Mahesh Jayawardena, responded to the claims by noting that it is typical for 20 to 25 tea factories to close annually, with an equal number of new ones being established. He stated that he was unaware of such a large-scale shutdown and promised to investigate the matter further.
Efforts to obtain comments from the Chairman of the Sri Lanka Tea Factory Owners’ Association, Lionel Herath, were unsuccessful. Nonetheless, several tea factory owners confirmed that many factories have indeed closed recently. They attributed the situation to both the leaf shortage and poor management practices in some factories.
While Sri Lanka’s tea exports continue to shine in international markets, the foundations of the industry appear increasingly unstable. Without urgent intervention to resolve the leaf supply issue and support struggling factories, the country’s tea legacy could be at serious risk—despite its growing global demand.
