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by Anura Maitipe

Sri Lanka tea export earnings topped the Rs. 50.5 billion in foreign exchange this year. Export figures recorded 280.6 million kilograms. This included a record price of Rs. 24.50 per kilo of green tea, a spokesman for the Ministry of Plantation Industries told the Daily News yesterday.

Above, an upcountry tea cultivation (below,) tea being packed for export

During the UNP regime the tea industry was on the verge of collapse. With the selling price of tea which stood at Rs.48 a kilo in 1977 dropping to Rs. 35 a kilo in 1978.

The buying price of green tea also dropped from Rs: 12.00 a kilo to Rs: 8.00 in 1977.

From then until 1995 the price of green leaves fetched by growers stagnated around Rs. 8 to Rs.10 a kilo, the spokesman said.

Low selling prices resulted in negligence in the management of a large extent of tea, and over 35 factories had been forced to shut down. Growers faced severe difficulties in financing the replantation of neglected lands and modernisation of factories, the Ministry spokesman said.

The PA Government allocated Rs. 800 million with Asian Development Bank assistance for the development of tea plantation. Under this project tea planters were granted credit facilities on concessionary terms of repayment at low interest rates. The disbursement of small scale loans was channelled through the DFCC Bank, Bank of Ceylon and People's Bank, while medium scale loans were issued by the DFCC. The repayment period of these loans ranged from 5 to 10 years at 14 percent interest with a grace period of 16 months.

The scheme of financing helped tea small-holders over obstacles they faced. It also helped in the modernisation of tea factories, the spokesman said. Sri Lanka the World's largest high quality tea producer which has always been at the top of the market increased tea exports by 18.2 percent.

Statistics for the last five years show a significant increase of yield area-wise in Nuwara Eliya - 30 percent, Badulla and Bandarawela - 35 percent, Balangoda - 37 percent, Kandy - 28 percent, Ratnapura - 38 percent and Galle and Matara - 38 percent, he said.

The tea industry which has earned over Rs 46 billion annually remains one of the country's main sources of foreign exchange earnings. The salaries of workers have increased almost three fold since 1994, the Ministry spokesman said.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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