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Commercial plantations urge immediate government action to prevent industry’s demise

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4 years ago

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RPCs allege discrimination by authorities on allocation of fuel for leaf and latex transport and power generation

Calls for radical and bold reforms to resuscitate industry including allowing hybrid $ auctions

Calls for additional assistance to increase production to enhance dollar earnings and measures to reduce high COP

The Government’s failure to allocate fuel quotas to the Regional Plantation Companies (RPCs), together with continuous power disruptions and uninformed policymaking, is bringing Sri Lanka’s commercial plantations to a standstill. Due to the lack of fuel, all leaf and latex transport operations have been severely impacted and there is insufficient fuel to operate standby generators.

Accordingly, the Planters’ Association of Ceylon (PA), demanded that authorities take immediate action to prioritize Sri Lanka’s plantation industry which contributes over USD 1.5 billion to Sri Lanka’s export revenue.

Commenting on the dire situation, PA media spokesperson, Dr. Roshan Rajadurai cautioned that the Government’s continuing failure to give any priority whatsoever to the needs of RPCs and the broader industry, together with a series of catastrophic policy blunders had resulted in severe disruptions to production and transport and rapid escalation of production cost of tea by around 30% from the beginning of 2022.

“RPCs will no longer be able to continue operations as usual if real and meaningful solutions are not provided immediately,” emphasised Dr. Rajadurai. “Despite our critical contribution to the industry and the Sri Lankan economy, the authorities have failed to understand our value. Instead they have continuously discriminated the RPCs even in the past, as compared with other export industry stakeholders and the rest of the plantation sector.”

“Our sector was severely disrupted even before the current domestic economic crisis by uninformed policy making decisions, including the completely irrational ban on import of essential agriculture inputs. The issues we are seeing now across the economy are directly connected to this unplanned, unscientific, and short-sighted approach to policy,” Rajadurai added. “While at long last, the Government has publicly accepted the failure of this policy, the once vocal proponents of such unsound claims are nowhere to be seen although the industry continues to pay the price, despite our repeated warnings and admonitions about the ill effects of such policy.”

While the Government retracted its decision to ban imports of agricultural inputs such as fertiliser, recommended weedicides, fungicides and pesticides, these have not been available since April 2021. The bureaucratic processes required for the bans to be lifted takes a long time, and have obstructed imports, creating severe shortages. Compounding these challenges, the depreciation of the Rupee and the global increase in commodity prices have resulted in the price of these essential inputs skyrocketing. For instance, the price of fertiliser used for tea has increased 25-fold from before the ban; from approximately Rs. 30,000 per metric tonne (MT) of urea to Rs. 750,000 per MT and prices are still increasing.

As a result, the cost of production of 1kg of tea has now risen to nearly Rs. 800. However, at the Colombo Tea Auction, the Net Sale Average (NSA) of high-grown tea was only around Rs. 717, up to end March 2022.

In addition, the unavailability of inputs will reduce yields and quality in the long run. Despite better weather compared to last year, the industry has seen a decline in tea and rubber crops this year, compared with the corresponding period of last year, as the lack of agricultural inputs such as fertilizer, weedicides and fungicides begin to take effect. With tea and rubber being perennial/long-term crops, such adverse effects on yield could be felt throughout the productive life of the plant. Rubber cultivations too have been impacted by fast-spreading diseases such as pesta. In the absence of necessary inputs to arrest their spread the disease has already resulted in a 30% – 40% crop loss.

Tea estates operate throughout the 24 hours of the day and require uninterrupted electricity to do so. If, for instance, the withering operation is disrupted/interrupted for a few hours, bacterial contamination takes place, drastically reducing the quality of the tea produced. Acknowledging this, the authorities have allocated fuel quotas to the rest of the industry value chain for them to continue operations by running their generators during power cuts, but the RPCs have been inexplicably ignored.

Transporting inputs and raw materials such as green leaf and latex to and between large land areas in commercial estates and transporting produce to Colombo have also become extremely difficult due to the lack of fuel. This will lead to the complete breakdown of estate operations and consequently the RPCs will not be able to operate the estates leading to severe and serious social unrest under these present volatile situations in the country. Over 1 million people reside within the country’s large commercial estate sector and their livelihood is totally dependent on the plantation economy.

For the plantation sector to continue operations, uninterrupted power and fuel – including for internal transport – need to be provided as priority. Since suppliers are also now demanding for payments in foreign currency, the RPCs are also strongly urging the authorities to allow tea producers participating at the Colombo Tea Auction to obtain their payments from tea exporters in foreign currency.

A hybrid system, which allows exporters to pay tea producers in foreign currency and local buyers of tea to pay in Rupees is prudent and fair, considering how other export industries are allowed to obtain payments in foreign currency. Notably, 95% of Ceylon Tea is exported and the industry is a major generator of valuable foreign exchange for the country.

Given the sharp increase in the cost of vital agri inputs, the RPCs also urge the Government to include the commercial plantation sector in any beneficial scheme through which such inputs are made available to producers, using funds from multilateral agencies. The RPCs provide a range of services and care for a population of over 1 million residing in the estates and also support the smallholders by processing their tea leaves and rubber latex, serving as a vital cog in the industry’s supply chain.

In the medium to long-term, the RPCs see stable policymaking made in consultation with industry practitioners as essential for the growth and economic sustainability of the plantation industry.


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IMF talks conclude without staff-level agreement as Sri Lanka prepares November Budget

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9 hours ago

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2026/09/24

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Fund says discussions will continue on policies and parameters needed to complete the Seventh Review

By Sanath Nanayakkare

Sri Lanka’s latest talks with the International Monetary Fund (IMF) have concluded without a staff-level agreement on the policies and parameters required to complete the Seventh Review of its Extended Fund Facility (EFF), leaving further discussions ahead as the government prepares its next Budget.

An IMF team led by Mission Chief Evan Papageorgiou visited Sri Lanka from September 10 to 23 for discussions on the Seventh Review and the 2026 Article IV Consultation.

The Fund said the discussions with Sri Lankan authorities had been productive, but would continue in the near term towards reaching agreement on the parameters and policies needed to complete the Seventh Review.

The outcome therefore represents a delay in reaching the formal staff-level milestone rather than a breakdown in negotiations.

The latest mission comes as Sri Lanka moves from economic stabilisation towards longer-term structural transformation, while continuing to face external shocks and domestic fiscal pressures.

The IMF said economic activity expanded by 4.2 percent in the second quarter of 2026, marking the 11th consecutive quarter of growth. At the same time, the Fund cautioned that downside risks remained, particularly amid an uncertain external environment.

Gross official reserves had risen to US$6.9 billion by the end of August, while the banking sector remained well capitalised and profitable, providing some buffers against external pressures.

A major focus of the IMF’s latest assessment was Sri Lanka’s revenue position.

The Fund said developing and implementing a strong medium-term revenue strategy would be critical to sustaining revenue mobilisation and strengthening fiscal resilience.

It stressed the need to broaden the tax base, rationalise tax exemptions and incentives, and strengthen revenue administration and compliance.

The IMF also emphasised the importance of maintaining cost-recovery energy pricing and improving the efficiency and fairness of the tax system in order to reduce fiscal vulnerabilities.

These issues assume particular significance as the government prepares its next Budget, with the authorities seeking to balance revenue mobilisation and fiscal consolidation against the need to sustain economic recovery.

The Fund’s latest position does not indicate that negotiations have broken down. Rather, the IMF has said that discussions will continue towards reaching agreement on the remaining policies and parameters required to conclude the Seventh Review.

The latest talks follow the combined Fifth and Sixth Reviews, for which IMF staff and Sri Lankan authorities reached a staff-level agreement in April, subject to completion of the remaining requirements before consideration by the IMF Executive Board.

For Sri Lanka, the immediate challenge is therefore to preserve the gains made in macroeconomic stabilisation while addressing the remaining issues under the IMF programme and preparing a Budget capable of supporting longer-term fiscal and economic resilience.

With further discussions expected in the near term, the Seventh Review remains a work in progress as Sri Lanka enters another critical stage of its economic reform programme.

Notably, the IMF has yet to publicly specify the outstanding issues that remain to be resolved.

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UK digital expertise and Sri Lankan business leaders unite to explore growth through technology

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9 hours ago

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2026/09/24

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British High Commissioner Andrew Patrick

British High Commissioner Andrew Patrick hosted UK digital product consultancy Apadmi at Westminster House, his official residence in Colombo, for an invite-only forum bringing together senior business leaders from across Sri Lanka’s retail, banking, telecommunications, hospitality and public sectors.

The event, “Turning Digital Assets into Growth Engines”, marked Apadmi’s first official event in Sri Lanka since establishing its Colombo office in 2025, and was delivered in partnership with the British High Commission as part of ongoing efforts to strengthen UK and Sri Lanka commercial and technology ties.

Guests were welcomed by High Commissioner Andrew Patrick, followed by a keynote from Niresh Muthuratnanandan, Head of Omni Commerce, Digital & Loyalty at Keells Supermarkets, who spoke about the launch of the Keells Nexus app and the modernisation of a loyalty programme serving 2.9 million members.

A panel discussion followed, hosted by Mark Collin, Chief Growth Officer at Apadmi, and featuring Malik Induruwana, Chief Information Officer at HSBC Sri Lanka & Maldives; Jiffry Zulfer, Founder and CEO of PickMe; Uthpala Pinnaduwahewa of Hatton National Bank; and Marcus Hadfield, Chief Strategy Officer at Apadmi.

 The discussion centred on the commercial opportunity created by Sri Lanka’s rapid mobile adoption. According to [source], mobile data usage in the country reached 1.03 million terabytes in Q2 2026, a 31% increase year on year, against 29.4 million mobile subscriptions. With 71% of devices now smartphones or tablets, speakers discussed how Sri Lankan businesses could convert growing digital engagement into customer loyalty, new revenue and operational efficiency.

British High Commissioner Andrew Patrick said:

“It was a pleasure to welcome Apadmi and such a strong group of business leaders to Westminster House for this event. The UK and Sri Lanka have a longstanding partnership, and digital innovation is an increasingly important part of that relationship. Apadmi’s decision to establish a base in Colombo reflects the confidence that UK companies have in Sri Lanka’s digital economy, and I look forward to seeing this partnership continue to grow to the benefit of both our countries.”

 Mark Collin, Chief Growth Officer at Apadmi, said:

“Being hosted by the British High Commission was a real privilege, and a fitting way to mark the next stage of our commitment to Sri Lanka. To bring leaders from Keells, HSBC, PickMe and Hatton National Bank into the same room says a great deal about the ambition here. We opened our Colombo office because we believe Sri Lanka is at a genuine turning point; the talent is exceptional, and we are proud to be building here for the long term.”

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Planters’ Association Chairman proposes 5-point plan for industry revival at 172nd AGM

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9 hours ago

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2026/09/24

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Seated from left to right: newly elected Deputy Chairman of the Planters’ Association of Ceylon (PAC), Binesh Pananwala; Secretary General, Lalith Obeyesekere; newly elected Chairman, Shanaka Samaradiwakara; Governor of the Central Bank of Sri Lanka, Dr. Nandalal Weerasinghe; and Chairman of the Sri Lanka Tea Board, Raj Obeyesekere.

Malwatte Valley Plantations PLC Director / CEO, Shanaka Samaradiwakara was appointed as Chairman of the Planters’ Association of Ceylon (PAC), while Kahawatte Plantations PLC Director / CEO Binesh Pananwala, was appointed as Deputy Chairman at the Association’s 172nd Annual General Meeting (AGM) on 19 September at the Cinnamon Grand.

The event was graced by Central Bank of Sri Lanka Governor, Dr. Nandalal Weerasinghe and Sri Lanka Tea Board Chairman, Raj Obeyesekere as Chief Guest and Guest of Honour respectively.

In his inaugural address, Samaradiwakara outlined a five-point vision for the plantation sector, focusing on value addition, research and development, land-use and productivity, irrigation and long-term security of tenure. He emphasised that the future of commercial agriculture in Sri Lanka would hinge on how effectively all industry stakeholders could work together, while maintaining clear understanding of the ground realities faced by producers.

Value-added tea accounted for more than 50% of total tea export volumes in 2025. Samaradiwakara noted Regional Plantation Companies (RPCs) have accounted for the majority of that volume through continuous investments, including most recently in matcha, green tea and artisanal teas.

In that context, he sought the support of the Sri Lanka Tea Board and the export sector to protect this emerging high value segment, given that significant quantities of green tea and other high-value teas remain unsold at auction while similar products continue to enter the country. “We respectfully request the authorities to review this matter and introduce appropriate measures to support domestic production and value addition,” he stated.

On research and development, he observed that commercially viable alternatives to several essential crop protection products remain limited. Accordingly, he called on the Tea, Rubber and Coconut Research Institutes to lead the development of practical, scientifically proven alternatives, while stressing that disease threatening the rubber industry requires immediate attention. “We cannot afford to repeat the experience of the coffee industry, where coffee blight devastated the sector,” he added.

Turning to issues around land-use policies and productivity, he noted that RPCs have diversified for over two decades in response to changing rainfall patterns, introducing crops such as oil palm, pepper and avocado. He warned that these investments are increasingly threatened by unsupportive policy, agricultural theft and crop damage by wild animals, costing companies millions of rupees each month in security. “It is imperative that these investments are protected through strong enforcement, appropriate regulatory reforms, and effective measures to address both agricultural theft and crop damage,” he noted. On irrigation, he appealed to the Government to relax archaic restrictions on groundwater use and simplify approvals for drilling tube wells in order to enhance climate resilience.

Addressing security of tenure, he highlighted that replanting often takes more than a decade to generate meaningful revenue, and that uncertainty over lease extensions is making it harder for RPCs to attract foreign direct investment and long-term financing. “If we are to attract fresh capital, accelerate replanting, modernise our plantations and improve productivity, security and certainty of tenure are mandatory,” he added.

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