Rs. 599 m flood loss for tea

Saturday, 10 June 2017 01:15 - - {{hitsCtrl.values.hits}}

Despite the tea industry escaping any long-term impact from the recent floods, the sector is projected to have lost Rs. 599 million worth of tea and machinery according to officials, and would have to relocate over a dozen factories to escape future disasters.

Even though he dispelled fears of serious volume losses, Tea Commissioner E.A.J.K. Edirisinghe nonetheless believes about Rs. 599 million - with tea constituting an estimated Rs. 172.4 million and machinery accounting for Rs. 426.7 million - has been lost. The total quantity of tea lost was approximately 244,494 kilogrammes, while 49,485 kilogrammes are green tea leaves. An additional 50,556 kilogrammes of refuse tea was also lost.

Sri Lanka Tea Board Chairman Rohan Pethiyagoda told Daily FT monsoonal rains are a regular occurrence in April and May, and as such there will be little impact on the tea industry in the long term. He also expressed confidence that selected private factories would bounce back from the disaster over the next few months.

However, he admitted smallholder companies would struggle as they had little capacity to absorb a challenging disaster situation.

The Tea Board is conducting an assessment of the total damage incurred during the recent floods. The Tea Commissioner has submitted a formal recommendation to relocate 14 factories that are vulnerable to frequent disasters.

“We will do an evaluation on the proposal made by the Tea Commissioner and discuss it with those factories as well to provide them with a long-term solution,” he noted.

According to Tea Commissioner Edirisinghe, a total of 26 tea factories were affected by the recent torrential rains, but of that only 14 were severely damaged.

Most of these have been recommended for relocation but this could be done at a reasonable cost.

Concurring with Pethiyagoda’s views, Edirisinghe said there would be no impact on the country’s tea industry in terms of quantities going forward as only 14 factories were severely affected out of the total 709 factories in operation.

“There will be no major impact to the volumes at the forthcoming tea auctions as the other factories in the island are performing as usual. We could anticipate a slight decline of around 2% to 3% of the production, but it is not big,” he pointed out.

Commenting on the relocation plan, Edirisinghe said 14 factories which are mostly situated around river banks needed to be relocated.

“I think relocation of these factories is necessary, especially, when you consider the loss of foreign exchange to the economy due to calamities of this nature. The cost involved in relocation will not be an extra burden on the Government as these factories already have machinery,” he stressed. (CdeS)