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| Sunday, 16 February 2003 |
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| News Business Features Editorial
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Tea sector runs cold by INDUNIL THENUWARA The tea industry is facing a grave crisis due to low prices and less demand at the tea auctions. Although representations have already been made, the authorities have still not realised the gravity of the situation, the Private Tea Factory Owners Association said. The Association conducted a special emergency general meeting last week to discuss the impending crisis situation in the tea industry and the steps they should take to avert it. The tea market has been experiencing a drop in prices and less demand mainly in the Low Grown sector due to speculation of a war in Iraq and the uncertainty rising out of this situation. The problem is expected to worsen in the future, which would seriously affect the cash flow of factory owners, resulting in payment delays to green leaf suppliers. This will have a serious effect on the village economy as the weekly reimbursements to small holders by private tea factory owners is in the region of Rs. 500 million. Amara Dissanayake, a committee member expressed disappointment that despite repeated representations, nothing conclusive has been done to assist factory owners. Speaking on behalf of the Association, he said they will have to resort to 'tough measures' unless their requests are met soon. Private Tea Factory Owners demanded that they be temporarily relieved of payments of loans, interest, electricity bills etc; the directive on fair prices to be temporarily withheld; and paying leaf suppliers according to sales, until the crisis is resolved. They also appealed to the Government to look into the issues raised by media that certain factions are influencing prices at tea auctions and if these claims are true, to take action to prevent such occurrences in the future. "Tea factory owners are in dire straits with lack of capital being a major constraint. What we would like through government intervention is to get working capital without collateral or security. If the industry is to go on, the government should provide concessions when we are in difficulty," said Chairman of the Association Dr Sarath Samaraweera. "In a few weeks, we may find that we are unable to pay leaf suppliers due to large volumes of tea remaining unsold. This will have serious repercussions on the whole industry. So we will have to get out of the formula which presently exists where payments to small holders are concerned," he said. |
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