Sri Lanka's tea smallholders, who account for 76% of the national tea output, are facing serious problems which they say could adversely affect the whole industry.
The price of the green leaf has been dropped to Rs.70 to 80 at present from Rs.90 to 105, they claimed. "Tea smallholders are facing some serious problems due to a rapid drop in prices and high maintenance costs that will directly contribute towards reducing the national tea output in the future.
Unless prudent measures are taken to resolve these problems, Sri Lanka's tea industry is at risk of collapsing according to a senior member of the Sri Lanka Federation of Tea Smallholder Development Societies.
This situation has arisen following sanctions imposed by the US against Iran and its impact on Ceylon tea purchasing countries in the Middle East, Russia and Turkey, he said.
The currency depreciation due US economic policy has hit the countries in the Middle East he said adding that Turkey’s currency has depreciated 4 o per cent.
Tea smallholders are facing serious issues of increasing cost of production, mainly driven by higher labour costs, which is making the sector unsustainable. This is also preventing re-investment in land development and replanting, which is expected to hurt industry productivity and quality of "Ceylon" tea, in the future.