Ceylon Tea production costs soar
Ceylon Tea has been making relative gains in prices but this has not contributed to cover overall costs to produce it on the plantations, Regional Plantation Companies said.
“As producers we encourage the increase in price,” but the fact remains that the “increase in no way absorbs the increased cost of production currently faced by the plantations”, Hayleys Plantations Managing Director Roshan Rajadurai told the Business Times.
He noted that prices were high due to a number of factors, since there was a low supply due to the drought in the first quarter and the high demand for Ceylon Tea.
April had been a low cropping month with costs of production soaring to Rs.800 per kilo of tea out of which wages account for 67 per cent, he said.
Due to the current conditions in the wake of the coronavirus there is no normalcy and most would pluck only about 14 kg of tea daily compared to the norm of 18 kg, Mr. Rajadurai said.
He explained that currently there is an influx of workers’ families now returning to the plantations but none has asked for more work.
On the contrary those found to not engage in social distancing while at work have been warned off the plantation, Mr. Rajadurai said.
However, going forward the industry expects tea prices to stabilize and said they hoped for a better cropping period in June and July.