Drought may lead to closure of factories

by Lalin FERNANDOPULLE

Tea production has been severely hit by the dry weather prevailing in the country and if the drought continues for another week several factories would have to close, said an official of the Tea Brokers’ Association.

He said production of tea in all regions has been adversely affected by the unusual weather and if the situation does not change, around 30-40 factories will have to stop operations.

According to reports global tea production declines during the first three months of the year due to the drought in many regions. The low volume at last week’s tea auctions was attributed to the adverse weather conditions in the country which helped prices to be stable.

Tea brokers said that though production has been low, prices have improved since last month with few fluctuations. They said though there is some hope for the tea industry to revive the future is uncertain due to the impact of the global recession.

Large volume tea exporters have not received sufficient orders and they seek long term credit facilities. Buyers have withheld orders due the intensity of the recession. Tea purchase by Russia dropped due to the devalued currency making Sri Lankan exports uncompetitive.

Director Promotion, Sri Lanka Tea Board, Hasitha de Alwis said tea prices at this week’s auctions were good compared to last week. Prices of low grown had a substantial growth fetching Rs. 310 per kg.

“Tea production will hit low in the next few months due to the drought due to, inadequate application of fertilizer and restrictions on plucking”, he said.

Tea industry experts said that the industry is yet to see the benefits of the stimulus package and that if no quick remedial action is taken the downfall of a premier industry will be imminent.