Tea: Record earnings vis-a-vis climate change
Sri Lanka’s tea industry, the historic backbone of our economy, is entering a period of storage contradictions. As of late 2025, the news from counting houses is good: export earnings for the first 10 months of the year reached US$1.29 billion, a healthy 9 per cent increase compared to last year. However, walking through estates in the hill country tells a different story. Behind the billion-dollar success, is an ongoing labour crisis and a climate that is becoming increasingly unpredictable.
To understand the sector, we must look at the numbers provided by the Central Bank and Sri Lanka Customs. While we are making more money, we aren’t necessarily “growing” more efficiently.
- Export Growth: The average price we get for our tea (FOB value) is roughly $5.86 per kg.
- The Buyer Shift: Iraq remains our top buyers, but Libya has emerged as a massive surprise, with imports surging by over 130 per cent this year.
- Production Gaps: Even through earnings are up, our “High Grown” tea the premium quality stuff saw a 6 per cent drop in production this year.
Why is production struggling? There are two main reasons every business leader should watch:
1. Climate Instability: Recent landmark studies warn that Sri Lanka could lose nearly 14 per cent of its optimal tea growing land 2050 due to rising temperatures. This year’s floods from Cyclone Ditwah also reminded us how vulnerable our estates are.
2. The Labour Shortage: Young people are moving away from traditional estate work. This creates a “productivity gap” that can only be filled by technology.
For “Ceylon Tea” to stay on top, the industry must look toward the next century. According to the Tea Research Institute (TRI), which is celebrating its’ 100th anniversary this year, the answer lies in:
- Agri-Tech: Using precision irrigation and sensors to manage soil health
- New Clones: Planting climate-resilient varieties (like the TRI 2025 series) that can survive droughts better.
- Value Addition: Selling more “Tea Bags” and “Instant Tea” (which saw huge growth this year) rather than just selling “Bulk Tea”.
Sri Lanka’s tea industry is no longer just about the heritage of the past 150 years; it is about the technology of the next 50. We are currently “winning” because global prices are high, but that won’t last forever. If we want to keep the “Green Gold” shinning, we must invest in the roots of the industry today.
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