Sri Lanka’s tea output could fall 40 percent in 2022 and rubber could be wiped out by leaf disease, threatening livelihoods and export revenues, if a fertilizer agro-chemical ban suddenly imposed this year is continued, industry officials said.

“In 2022, all experts estimate that we will record a reduction in tea exports over 40 percent,” Bathiya Bulumulle, President of Sri Lanka’s Planters’ Association said at its annual general meeting.

 “With an immediate halt to use of fertilizer of agro-chemicals, the consensus is that there will be severe crop losses, and as a result, a reduction in export revenues by as early as the end of this year.”

Sri Lanka has banned imports of fertilizer saying 300-400 million dollars were spent on it a year and those agro-chemicals caused non-communicable diseases. Sri Lanka’s central bank has been printing money, triggering forex shortages.

Up to now plantations companies are using fertilizer already imported to the country for tea. Crop losses have not been severe up to July, amid good rainfall though down from 2019.“Sri Lanka exported 1.2 billion US dollars of tea in 2020 and 1.3 billion in 2019.

The government at the moment has introduced liquid nitrogen. However its efficacy compared to urea based fertilizer is not yet known, planters said.

Usually, Sri Lanka’s Tea Research Institute or Rubber Research Institute recommends fertilizer and application volumes after study.

Rubber is also hit by diseases and is under threat without adequate fertilizer.“By the end of 2021, the industry expects an estimated 20 percent Year-on-Year reduction in output from rubber plantations due to this disease,” Bulumulle, said.

A leaf disease (Pestalotiopsis ) is spreading in the plantations. Already about 20,000 hectares are affected.Rubber plantation experts have said it has reached an epidemic level.

“This disease results in continuous fall of tree leaves so the Rubber Research Institute has instructed us to give additional dosages of fertilizer,” Bulumulle explained.

Farms need fungicides, Carbendazim and Hexaconazole and also fertilizer to help the trees recover leaves.

“One of the key issues in addressing Pestalotiopsis is the lack of necessary fertilizer and the required agrochemicals,” Bulumulle said.

“Since rubber trees lose their foliage due to the disease, to compensate and provide extra nourishment for foliage re-growth, the Rubber Research Institute’s main recommendations is to apply additional inorganic fertilizer,”

The shortage of fertilizer is also going to hinder progress on replanting of rubber, given that the uptake of fertilizer is most crucial when rubber is in the nursery phase, Bulumulle said

 The International Trade Administration Agency under the United States (U.S.) Department of Commerce (DoC) has launched an investigation into certain steel nails imports from Sri Lanka and a few other countries.

The Investigations centered on steel nail imports violating anti-dumping (AD) and countervailing duty (CVD) laws by Sri Lanka and some other countries, according to a notice published on Federal Register this week.

The petitions were filed on December 30, 2021 by the largest steel nail producer of U.S.Mid Continent Steel & Wire, Inc.

The petition included AD (less than fair value) allegations against India, Sri Lanka, Thailand, and Turkey and CVD allegations against India, Oman, Sri Lanka, Thailand, and Turkey due to countervailable subsidies given by the respective governments.

“Based upon our examination of the Petitions on steel nails from India, Oman, Sri Lanka, Thailand, and Turkey, including supplemental information provided by the petitioner, we find that the Petitions meet the requirements of section 702 of the Act.

Therefore, we are initiating CVD investigations to determine whether imports of steel nails from India, Oman, Sri Lanka, Thailand, and Turkey benefit from countervailable subsidies conferred by the governments. 

In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 65 days after the publication date of these initiations,” the  International Trade Administration Agency stated.

Mid Continent Steel & Wire named 11 companies in India; four in Oman; five in Sri Lanka; five in Thailand; and six in Turkey as producers/exporters of steel nails and the DoC intends to follow its standard practice in CVD investigations and calculate company-specific subsidy rates in these investigations.

However, a top official at the Trade Ministry said the Ministry was yet to be formally informed on these cases.

In 2019, Sri Lanka exported US$ 31 million worth iron nails, becoming the fastest growing exporter of iron nails, while China was the largest exporter of iron nails with US$ 1.42 billion exports. The U.S was the largest importer of iron nails in the year with US$ 1.03 billion worth imports.