Sri Lanka, facing foreign exchange crisis, seeks to revive its prized tea exports

In a bid to revive its prized tea industry facing an export collapse, the Sri Lankan government has said it will provide fertilizer subsidies to tea cultivators who have been suffering since the ban on chemical fertilizer last year

Jan 21, 2022
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Sri Lankan tea

In a bid to revive its prized tea industry facing an export collapse, the Sri Lankan government has said it will provide fertilizer subsidies to tea cultivators who have been suffering since the ban on chemical fertilizer last year.  Sri Lanka is one of the world's top tea producers and exporters.  

Ramesh Pathirana, Sri Lanka’s Minister for Plantation Industries, said an agreement has been reached between the government and the Tea Board of Sri Lanka and they will soon implement a fertilizer subsidy scheme for tea cultivators.

Sri Lanka’s export earnings through tea are over $1 billion annually. However, these earnings are declining over the years for various reasons. In 2018, the country exported tea worth $1.4 billion; It was 1.3 billion in 2019 and $1.2 billion in 2020.
Quality degradation, lack of new plantations were behind this fall. However, last year’s ban on chemical fertilizer jolted the industry players. Organic fertilizers that the government wants them to use are of no use for the industry.

As a result of the ban, crops started failing and the industry issued an ultimatum to the government about the possible collapse of the export. [Read More]

In the last few months, the government issued several orders, easing pressure on the industry. The Ministry of Plantation Industries stated that tea production has increased in the previous year compared to 2020, which was 279 million kilograms. In 2021, the tea harvest reached 305 million kilograms, the ministry claim. 

Tea exports account for a tenth of its total exports. And at a time when Sri Lanka is already going through a severe forex crisis, protecting export-oriented industries is now a priority for the government. 

(SAM)

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