There is a problem with the tea, which also affects the price

By: Trademagazin Date: 2024. 05. 30. 10:48

Sri Lankan tea growers have expressed their displeasure over the government’s announced decision to increase wages by 70%, which they say will exacerbate the country’s financial crisis and threaten the competitiveness of national tea exports. The country, which produces approximately 250 million kilograms of tea annually and exports 95% of it abroad, is currently struggling with a serious economic crisis, which is further aggravated by the lack of foreign exchange.

The wage increase, announced by the labor ministry, which requires plantation companies to start raising wages from next month, is the result of months of negotiations. However, the Planters’ Association of Ceylon (PAoC) says the decision is unfair and unsustainable as the industry was not properly consulted. Roshan Rajadurai, a spokesman for the association, said the wage hike would undermine Sri Lanka’s position in the global market, where it competes with India and Kenya, which boast lower costs and higher productivity.

The wage increase will put an additional financial burden on the plantation companies, creating an additional cost of about 35 billion rupees in total. The Ministry of Labor has warned that plantation companies that do not comply with the new regulations may be nationalized by the government.

Unions, on the other hand, support the wage increase, saying that it was a necessary step to alleviate the growing poverty of the population, which is a consequence of the economic crisis. Negotiations are ongoing, and although the concerns of tea growers pose serious challenges, unions and workers are hopeful that the wage increase can improve living conditions and stabilize the economy in the long term.