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Lanka tea industry may lose $ 10-15 mn per week from ME war

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The ongoing military conflict in the Middle East has adversely impacted on the Sri Lankan tea industry as the exporters are unable to supply tea to the region. The exporters estimate the revenue loss at about $ 10-15 million per week. The exporters have orders in hand for supply of tea and it is the logistical issues and war risk preventing them fulfilling such orders, the Tea Exporters Association (TEA) said in a statement.

“In order to mitigate the impact on the industry, the tea industry has jointly requested the government to support it in addressing the cash flow issue and consider absorbing a part of the additional freight and insurance charges. It has also requested government intervention to obtain the balance payment of about $ 50 million due on tea shipments already made to Iran under the barter deal,” TEA said on Friday.

The statement said approximately 52% of Sri Lanka’s tea exports reach the affected region mainly coming from the low grown area of the country dominated by tea smallholder farmers. According to 2025 tea export statistics, about 125 million kilograms of Ceylon tea were exported to the Middle East, with an estimated value of USD 750 million. The major importing countries of Ceylon Tea in the region include Iraq, Iran, Libya, Turkey, Saudi Arabia, Syria, and the United Arab Emirates. Though Libya and Turkey can be reached via Africa, the exorbitant freight charges have prevented the buyers in those countries from importing tea at the moment.

The supply routes to Middle East countries go via Strait of Hormuz and Red sea Suez Canal. Although there is no blockade on Suez Canal, due to the war risk both channels are currently not used by the major shipping lines. The tea exports to the region have almost come to a standstill due to the following reasons:

=All major shipping lines suspended their services to the region immediately after the outbreak of the conflict.

=Several seaports in the region were temporarily closed during the initial stages.

= Although a few shipping lines resumed limited operations from March 4, freight charges have

increased significantly by approximately USD 1,800 for a 20’ container and USD 3,000 for a 40’ container.

= Existing insurance coverage obtained by exporters is no longer valid.

=There is a lack of regular and scheduled vessels operating from Colombo to Middle Eastern destinations.

The tea exporters are experiencing serious cash flow constraints, as payments for shipments already

dispatched have been delayed due to the unsettled situation in the region. This has restricted exporters’

buying capacity and that was evident at this week’s tea auction, where overall prices declined by about Rs. 50/ per kg while low grown tea prices declined by about Rs. 75/ per kg.

If the situation continues for few more weeks it will have a serious impact on the tea auction as buyers may curtail the purchase of tea if the outward movements are restricted. This could directly impact on the income of the tea smallholder farmers.

In January 2026, the country earned $ 121.8 million from tea exports compared to $ 112.7 million in January 2025 (a 5% increase). The figures for February 2026 are not yet available but should be either similar to last year or higher. The disruption to tea exports in March will certainly affect the volume and value of the exports though the exact amounts cannot be estimated at this point.

According to the available data Sri Lanka has settled about 95% of its debt to Iran by supplying tea to Iran under the Tea for Oil mechanism. Even if the military conflict comes to an end, Sri Lanka will find it difficult to continue to supply tea to Iran unless a new mechanism is introduced. Under the prevailing US sanctions on Iran, the exporters may not be able to supply tea to Iran outside the barter system. Iran purchases about 11 million kg of tea from Sri Lanka annually under the barter deal.

The situation was discussed with the Minister of Plantation & Community Infrastructure at a meeting held on March 4, 2026.



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Sun directly overhead Nittambuwa, Algama, Malwana, Aranayake, Meegahakiula and Panamkadu about 12.09 noon today (04)

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The sun is going to be directly over the latitudes of Sri Lanka from 28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is overhead today (04) are Nittambuwa, Algama, Malwana, Aranayake, Meegahakiula and Panamkadu about 12.09 noon.

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Norochcholai digs into dwindling coal stocks, two units slash generation

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Plant’s output cut from 270 MW to 140 MW amidst dwindling stocks; energy analysts warn system remains “at a razor’s edge”

By Ifham Nizam

The Norochcholai coal-fired power plant is now digging into the last dredges of its coal stock, with two operational units forced to slash generation from around 270 MW to just 140 MW on Sunday as the plant ran critically short of fuel, according to independent energy analysts and sources familiar with the National System Operator (NSO).

The sudden reduction of approximately 130 MW in coal generation has once again exposed the fragile state of the country’s power supply arrangements, with the plant understood to have coal stocks sufficient only until Friday night.

“This is not how a coal plant is expected to operate. They are digging up the last dredges of coal from the plant,” an independent energy analyst told The Island.

The analyst questioned why the units had been allowed to reach this stage without earlier intervention, arguing that at least one unit should have been deloaded around 10 days ago to conserve the remaining coal.

Had that been done, the analyst said, the country could also have reduced its dependence on more expensive diesel-fired generation during the period when

coal stocks were being conserved.

The latest NSO generation figures highlight the continuing pressure on the system.

Around 7 p.m. on Sunday, when the night peak was reached, total demand stood at 2,552.7 MW. Coal contributed only 282 MW, while major hydro accounted for 1,215.8 MW and thermal-oil generation for 791.9 MW.

The night peak of 2,552.7 MW was substantially higher than the daytime peak of 2,246 MW, according to the NSO Generation Summary for August 30.

The most immediate concern is the remaining coal stock at Norochcholai.

Sources said the plant has coal only to Friday night, making the timing of the next shipment critical.

The first shipment under the emergency arrangement is expected to arrive on Friday, September 4, but the coal unloading will have to begin on the same day if

the power plant is to continue operating without further significant deloading.

That creates another potential vulnerability, with rough sea conditions posing an additional challenge to unloading operations.

Energy sector sources said that even the arrival of the September 4 shipment would not completely eliminate the danger.

The next shipment under the new coal tender would need to commence unloading around September 15. Any significant delay beyond that could again force the Norochcholai units to operate at reduced output.

“We are still at a razor’s edge”

The independent energy analyst said the situation should not be viewed merely as a question of whether a particular vessel arrives on time.

The situation also means that any further reduction in coal generation could have a direct impact on the use of oil-fired power generation, potentially increasing the cost of electricity generation.

The latest NSO figures already show the important role being played by thermal-oil generation during the evening peak, when demand rises sharply.

The analyst questioned the rationale behind allowing the coal units to continue operating at higher loading until stocks reached critically low levels instead of taking measures earlier to stretch the available inventory.

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22A: BASL decides against making written submissions after SC refuses to grant it right of reply

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The Bar Association of Sri Lanka (BASL) has informed the Supreme Court that it would not tender written submissions in respect of the petitions challenging the 22nd Amendment to the Constitution, which were heard on September 1 and 2.

The BASL said it had initially decided not to make written submissions after being deprived of the right of reply when the Solicitor General, appearing for the State, made submissions and explained the rationale and justification for the Bill.

The BASL pointed out that the Solicitor General, who made submissions at the end of the second day of the hearing, had not made a policy document available to the petitioners.

It also said the petitioners had not been given an opportunity to respond orally to the Solicitor General’s submissions or to address the Court on certain questions raised by the judges during their exchanges with the Solicitor General. (SF)

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