Smallholder tea in urgent need of investment: TEA

Sri Lankan smallholder tea planters are in urgent need of investment for replantation, as yields decline, and as the country is targeting a production of 400 million kilogrammes of tea and $ 2.5 billion in exports, Tea Exporters Association (TEA) Chairperson Huzefa Akrabally said at the association’s 26th annual general meeting (AGM).

“Smallholder yields have declined, and urgent investment is required in replantation and block-in-filling to secure their future. With the right support, Ceylon Tea can achieve the government’s target of 400 million kilogrammes and $ 2.5 billion in export revenue by 2030.”

Akbarally noted though industry productivity is driven by smallholder plantations, the projected target for 2030 may not be achieved unless there is investment.

“In 2025, we project tea exports of 270 million kilogrammes and revenues exceeding $ 1.5 billion, an increase of nearly 10% from last year. This growth is a testament to the resilience of our smallholder farmers, who produce 70% of Sri Lanka’s tea.”

“By 2030, our ambition is to reach record levels of production and exports. This requires strengthening the foundation of the industry by empowering smallholders, adopting new technologies, and building resilience.”

Industry and Entrepreneurship Development Minister Sunil Handunneththi said: “The name ‘Ceylon Tea’ carries weight worldwide. To safeguard it, we must move beyond bulk exports and focus on branding, packaging, and value addition. Fertiliser supply and global competition are critical challenges, but through partnership between government and the private sector, I am confident the industry will achieve its highest returns yet.”

IMF Resident Representative for Sri Lanka Martha Tesfaye Woldemichael said: “This AGM is not just a business gathering, it is a celebration of resilience. Like Sri Lanka itself, the tea industry has weathered the crisis and is now on a path to revitalisation. More than 90% of Sri Lanka’s tea production is exported, sustaining two million livelihoods.”

“By embracing sustainability, competitiveness, and innovation, this industry can remain a cornerstone of the country’s economic renewal. Revenue mobilisation has improved significantly. International reserves continue to accumulate. Debt restructuring is well advanced and investor confidence is gradually returning.”

“These efforts have been focused on restoring fiscal and debt sustainability, rebuilding external buffers, keeping inflation in check and safeguarding financial stability. The programme also seeks to lay the foundations for strong and inclusive growth by addressing governance weaknesses and protecting the poor and vulnerable through stronger social safety nets.”

However, Wodemicheal noted that Sri Lanka’s recovery is still fragile, in addition to operating in a challenging global environment marked by elevated uncertainty due to global trade tensions and geopolitical conflicts.

“While the occurrence of external shocks is outside the control of authorities, it is possible to mitigate their impact by strengthening the resilience of the economy. This is why it is so important to stay the course on reforms.”

She urged the government to create an enabling environment for the private sector to invest, expand and create jobs.

“This requires sustaining macroeconomic stability through prudent policies, ensuring policy predictability and tackling governance weaknesses. Investor confidence will gradually improve as Sri Lanka builds a track record of sound policy and reform implementation. Within this broader private sector narrative, the tea industry holds a special place strengthening its competitiveness, embracing sustainability and capturing more value.”

source: The morning