Ceylon Tea facing worse price levels in 2 years
Ceylon Tea is currently facing its worse price levels in two years as the industry is incurring a high cost of production resulting in low demand and stiff competition from competitive markets.
Sri Lanka is facing low prices with this year’s National Average currently at Rs.1160 and High Grown at Rs.1083 compared to 2022 figures of a National Average at Rs.1234 and High Grown average at Rs.1093.
An industry veteran speaking with The Sunday Times Business said that the reason for this sharp decrease in prices is a result of the fact that tea is a commodity and other countries are producing larger volumes.
In addition Sri Lanka’s industry is having to incur higher costs of production with wages having increased by 35 per cent since last October.
Ceylon tea production is low on quantities as the industry still finds it hard to contain costs and improve the wage bill by improving on the work model adopted over the years to a more productivity based system.
The latter is a win-win model that some estates have already adopted and are engaged in where workers continue to receive higher wages as per the amount of work carried out by them.
Moreover, estates are also incurring higher lease rentals and in this respect the industry is looking for ways and means of cutting costs.
As a result of this situation where the traditional Ceylon Tea continues to slide in its production levels and receives some of the lowest prices, the shift is now on for a more popular beverage globally – coffee.
The industry is currently increasing its land extent coverage to around 300-400 hectares of coffee cultivation.
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