A leading buyer of tea pulled out of the Colombo tea auctions this week due to a transport crisis linked to goons connected to a politician. "It was a personal matter between the parties which escalated when the firm stopped buying," a tea broker told the Sunday Times.
However, other tea industry officials, who declined to be named, said the crisis was linked to an extortion racket allegedly carried out by goons who victimize tea firms transporting their stocks to stores located close to Colombo.
Officials of the buying house refused to comment, but a source associated with the company said the company had outsourced its transportation to a businessman who had dismissed an employee robbing tea. This worker had complained to the politician who wanted the man reinstated. The businessman had stood his ground and the trouble had begun.
"The buying house had seen no purpose in buying tea as it had no way of transporting and storing tea stocks and pulling out was the only way out.
The source went on to say that when Plantations Minister Mahinda Samarasinghe was alerted, he promptly contacted President Mahinda Rajapaksa who intervened to resolve the unpleasant situation.
The tea buyer was assured by Minister Samarasinghe that such incidents "will not happen again". The tea broker had expected a price hike of at least Rs. 10 per kilo in view of the devaluation of the rupee in the budget but the goons had prevented this advantageous trend.
The industry is having its own problems. Adverse weather conditions, worker wage increases and the recent decline in the Middle Eastern markets have increased the Cost of Production (COP). "We're now selling high grown teas around Rs. 300. This amounts to a loss of about Rs. 100 a kilogramme," the tea broker said.
Tea production has dropped by 30 to 40% with the price also dropping by about Rs. 50 when compared to last year. This is a big concern and the industry should be spared of any political mafia menace, the source said.