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126PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Sun Feb 03, 2019 10:14 pm


Senior Equity Analytic
Senior Equity Analytic

crs wrote:
charithaa wrote:the wage deal is not ended yet, as estate workers plans to carry on strike requesting the 700 is not fulfilling their regular needs.

වතු කම්කරුවන්ගේ වැටුප් වැඩි කිරීමේ ගැසට් පත්‍රය අත්හිටුවයි
තම දෛනික මුලික වැටුප රුපියල් 1000 දක්වා වැඩි කරන ලෙස හෝ  තමන්ට වැඩි කළ රුපියල් 700 මුලික වැටුපට රු140 ප්‍රසාද දිමනාව හෝ එකතු කරන ලෙස බල කරමින් හැටන් කොටගල ප්‍රදේශයේ වතු කම්කරුවන් පිරිසක් අද (03) විරෝධතාවයක් ආරම්භ කර  ඇත.
හැටන් කොටගල ප්‍රදේශයේ වතු කිහිපයකම වතු කම්කරුවන් හැටන් කොටගල ප්‍රදේශිය සභා කාර්යයාලය අසල හැටන් නුවරඑලිය ප්‍රධාන මාර්ගයේ එක් මං තිරුවක් අවහිර කරමින් විරොධතාවයක නියැලුණේය.
විරෝධතාවයේ නියැලි සිටි වතු කම්කරුවන් කියා සිටියේ වතුකරයේ නියෝජනය කර දේශපාඥයින් තමන්ට රු 1000 ක මුලික වැටුපක් ලබාදෙන බවට පොරොන්දු වි රුපියල් 700 ක මුලික වැටුපක් පමණක් ලබා දි එයට අදාල අවබෝධතා ගිවිසුම වතු හාම්පුතුන්ගේ සංගමය සමග අත්සන් කර ඇති බවයි.
රුලියල් 700 මුලික වැටුපට තමන් මෙතෙක් ලබා ගත් රුපියල් 140 ප්‍රසාද දිමනාව අහිමි කර ඇති බවද විරෝධතාවයේ නියැලි සිටි වතු කම්කරුවන් කියා සිටියේය.
අහිමි වු රුපියල් 140 ප්‍රසාද දිමනාව යලි ලබා ගැනිම සඳහා වතු හාම්පුතුන්ගේ සංගමය සමඟ පැවැත්විමට නියිමිත සාකච්ඡාවේදි එම රුපියල් 140 ප්‍රසාද දිමනාව ලබාදිමට රජය කටයුතු කල යුතු බව විරෝධතාවයේ නියැලි සිටි වතු  කම්කරුවන් කියා සිටියේය.
මේ අතර හැටන් මල්ලිඅප්පුව ප්‍රදේශයේද හින්දු පුජකවරයෙක් ඇතුළු වතු කම්කරුවන් පිරිසක් තමන්ට රු 1000 ක මුලික වැටුප තමන්ට අහිමි වු රු 140 ප්‍රසාද දිමනාව ලබාදෙන ලෙස බලකරමින් සත්‍යග්‍රහයක් ආරම්භ කර ඇත.

127PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Mon Jul 22, 2019 9:31 am



A sector to be looked at closely this week. The index chart becoming more bullish and hence can move deep into the overbought territory in short term.

128PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Jul 23, 2019 10:49 am



Nice to see some renewed interest in many plantation stocks today. Very Happy

129PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Jul 23, 2019 11:07 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

EquityChamp wrote:Nice to see some renewed interest in many plantation stocks today. Very Happy
ස්තුතියි එසී මම ගත්ත ඔයා කිව්වට පස්සෙ බලන්ගොඩ I love you I love you I love you

130PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Jul 23, 2019 7:07 pm


Manager - Equity Analytics
Manager - Equity Analytics

131PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Jul 23, 2019 7:35 pm



Index chart still within neutral stage and we have more companies records 10%+ gains within the day.

BALA, MADU, KOTA, MAL-X, HOPL, BOPL are some of those

Heavy trading also seen in some of these counters.

I think still there is enough team for more activities in the days to come.

132PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Wed Jul 24, 2019 10:32 am



Running for the second consecutive day. Basketball

133PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Oct 22, 2019 12:46 pm



Ohhh, Quibit, after long sleep....hahhha😘😘😘😘😘

134PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Oct 22, 2019 5:06 pm


Associate Director - Equity Analytics
Associate Director - Equity Analytics

Nice to see  our old members participation and well come quibit   Very Happy Very Happy Very Happy Very Happy Very Happy Very Happy affraid affraid affraid What a Face What a Face What a Face

135PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Oct 22, 2019 6:51 pm

Thushara Ayya

Thushara Ayya

I think BALA.N0000 is the best among the plantation sector...

136PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Mon Oct 28, 2019 8:28 pm

God Father

Senior Manager - Equity Analytics
Senior Manager - Equity Analytics


137PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Oct 29, 2019 1:26 pm


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

I am very negative on plantation sector since the both leading candidates  have already promised higher  day,s wage for estate sector which is already crippling.

138PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Oct 29, 2019 1:56 pm


Manager - Equity Analytics
Manager - Equity Analytics

Best solution is High productivity & fair wage for underpaid workers.

139PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Oct 29, 2019 4:37 pm


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

target1 wrote:Best solution is High productivity & fair wage for underpaid workers.
Exactly.That is the exact thing they wont do.Our labour force is far behind in productive wise when we compare our peers India , Kenya , China with regard to TEA industry.

140PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Fri Dec 06, 2019 11:16 pm


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

With the new gvt i guess this sector gonna run. Any recommended plantations to buy?

141PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Fri Dec 06, 2019 11:33 pm


Senior Equity Analytic
Senior Equity Analytic

MASK.............   RS20-30  within 2 month.......

142PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Sat Dec 07, 2019 10:29 am


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Impact of declining Rubber production to the economy

Natural rubber production in Sri Lanka is declining at an alarming rate from 155000 Mt produced in 1967 to 82600 Mt last year. Sri Lanka with over 140 years history as the pioneer rubber grower in the world outside South America, was in the fourth place in the world as a NR producer in late nineteen sixties has already fallen down to the 12th position, overtaken by countries entered into growing rubber much later, such as Vietnam, Cambodia and Myanmar. Rubber industry in Cambodia and Myanmar was developed with the expert assistance given by Sri Lankan scientists. With that technical support they were able to increase their rubber production by three to four times within 6 years. During this half a decade, the productivity of rubber lands in Sri Lanka has dropped down to 774 kg/Ha/ Yr while the same in Cambodia has risen from 450 Kg/Ha/Yr to 1090 kg/Ha/ yr.

At present, the contribution from the rubber industry to the total export value of Sri Lanka is only 5% of which, Rs 4.8 billion comes from the export of raw rubber particularly in the form of Latex crepe rubber. Income from rubber finished product export is US $ 864.4 Million (Rs. 152 Billion).

About 70% of the total rubber and latex production of the country is converted to value added products like solid tyres, foam rubber, surgical, examination and industrial gloves and also for making solid and pneumatic tyres and tubes, rubber floorings, toys etc. Last year, 135,000 Mt of raw rubber and latex have been consumed by the local products industry while the total production of raw rubber in the country was only 82600 Mt. Hence, over 76,000 Mt of both dry rubber and latex have been imported to meet the shortfall in 2018. It is best for the economy of Sri Lanka, if this upward trend in rubber consumption for value addition is continued. But, the danger is that already, the rubber products industry will have to depend largely on the raw rubber supplies from other Asian countries. How long can we rely on these supplies?

Hence, the time has now come for the RPCC to consider converting their estate latex used for the manufacture of latex crepe to good grades of RSS at a lesser cost, but selling at almost at the price of best quality latex crepe to meet the shortfall of RSS for local industries.

One of the major reasons for the drop in productivity of all agricultural crops in the country is the escalating labour wages, which makes the weeding cost very high, particularly after the banning of the use of the weedicide Glyphosate citing health reasons which is an unfounded fear created by fear-mongers. As a result, farmlands are not properly weeded now to minimize the absorption, by weeds, of limited quantities of nutrients, added to the soil as fertilizers, at a very high cost. If this ban is not lifted after a proper review of the health hazards, productivity of all crops including paddy will drop further in the future. However, despite this ban, solid Glyphosate is available anywhere in the country at a very high cost. But, during the past couple of years, urea and MOP fertilizers were very scarce all over the country at the correct time to apply.

Asian countries

At present, over 75% of the total rubber production in the world is consumed in Asian countries converting into end products as the rubber industry has now almost totally shifted from the developed Europe and USA to the developing Asia. The world’s largest consumer of NR today is China, consuming over six times the consumption of rubber by the USA. All the reputed makes of US, and European tyres are made under license in China, Thailand and Malaysia and exported all over the world. That is mainly because of their cheap and disciplined labour. There was a good possibility for Sri Lanka too to attract some of those investors here if our politicians and bureaucrats were smart enough. During the past 5 years, political instability was also another negative factor for the foreign investors to invest in projects in Sri Lanka. But, with the convincing election victory of the just elected President with a huge majority at the presidential election held on November 16, there should be a potential boost for investor confidence which will be an inducement for the investors to come to Sri Lanka for new investments.

Thanks to those who invested in rubber projects in Sri Lanka in early eighties, today, the domestic rubber price in Sri Lanka is maintained above the world market price thereby giving some kind of relief for the survival of the local rubber farmers.

The main reason for the drop-in rubber production in the country is the very low paid for raw rubber in the world market. In 2010, there was a shortfall of 240000 Mt of rubber price in the world market and hence the rubber prices rose up to over US $ 5 per Kg. Then all rubber producing countries expanded their rubber plantations to reap the benefit of this attractive high price. As a result, from 2011 onwards there was a surfeit of rubber in the market an excess was created and hence the rubber price started to decline again. Then most of the plantations neglected rubber fields, or totally abandoned them without tapping. Some lands were even converted to other crops. This change of attitude of rubber growers all over the world again reduced rubber production to create a shortfall in the market starting from 2014. But, the world recession started in 2013 continued to have its effect on the price of rubber thereby keeping it at very low level, below the cost of production.

International Rubber Study Group (IRSG) has carefully analyzed the world rubber consumption and supply situation and have predicted that the raw rubber prices should reach an attractive price within the next couple of years. But, by then, will there be rubber in Sri Lanka to sell at that price? It is very unlikely. Not only that, the rubber end products manufacturers of Sri Lanka will have a tough time to purchase rubber from other Asian countries, by competing with industrial giants like China, India and Japan in this region. Then, what will be the plight of over 30,000 skilled and semi-skilled workers employed in our rubber products industry at present?

Unfortunately, the productivity of most of the estates under private management has now fallen down to below that of rubber small holders’ due to non-adoption of Good Agricultural Practices (GAP) recommended by the RRI. It has been reported that in some of the plantations under RPCC, trees have been over tapped in merciless manner and hence young trees in some revenue areas in estates have been slaughter tapped without leaving bark to continue tapping in next 5 to 10 years. In many estates, over 50% of good trees are affected with Tapping Panel dryness (TPD) due to over extraction of latex. RRI introduced rain guards for rubber plantations to minimize crop losses during rainy months. Annually about 72 days of tapping is lost in Kalutara and Ratnapura districts due to rain interference. According to some reports, some RPCC fix rain guards and conduct double tapping far above the RRI recommendation and hence the whole idea of using a rain guard is lost and tapping panel dried trees in such estates have risen to over 50%.

Action must be taken by the Ministry of PI to stop this destruction of rubber plantations in a degrading manner by some RPCC. In some estates under RPC management, the productivity or the yield per hectare (YPH) has dropped down to about 550 kg/Ha/yr, which is far below the average productivity of 829 kg/Ha/yr in the whole country as reported by the rubber development department. Average productivity of rubber in Sri Lanka in 2013 according to RDD was 1300. This sharp drop in YPH from 1300 to 829 within three years is attributed to poor agronomic practices followed by some RPC managed estates all over the country.

In such poorly managed estates, apart from bad taping practices, replanting has not been done and fertilizer applications have not been carried out according to RRI recommendations for many years. From these facts, it is clear that the maximum crop that can be expected in the country for 2019 is even below 83,000 Mt; even though the RDD expect this figure to go up to 95000 Mt. In order to rectify this anomaly, Ministry of PI must get the assistance of the RRI to get the damage done to the plantation by such RPCC assessed and either to take over such badly managed estates to be managed by the state plantation corporation or to hand them over to more responsible different management company.

RRI and the Plantations

Rubber estates under French management in Cambodia use rain guards and conduct systematic stimulation of the clone Pb 314 and carry out tapping only once in 5 days without a single tree affected with tapping panel dryness and obtain a yield of 3200 kg/ha/ yr. If this tapping system is practiced in Sri Lanka too under strict RRI control, problem of rain interference on the yield can be mitigated; thereby increasing the productivity.

It is very sad to note that the relationship between the Rubber Research Institute (RRI) and the Plantations has deteriorated during the past decade due to unknown reasons. But if the Ministry of PI take appropriate measures to strengthen the interactions between the RRI and the plantations to implement recommended agronomic practices while totally eliminating wrong exploitation practices too for improving productivity at least to the national average level, importation of rubber for BOI companies for value addition can be curtailed to some extent.

It should be emphasized here that the technology developed by the RRI particularly in agronomy is quite enough to convert these badly managed estates to reasonably profitable level by improving productivity within two to three years. It is very clear from the role played by the RRISL scientists to convert rubber plantations in Myanmar and Cambodia even to overtake total rubber production in Sri Lanka in less than a decade. When they first commenced consultancy, in Cambodian plantations under UNDP sponsorship, productivity of rubber in Cambodia was only 420 kg/Ha/Yr. But, they were able to increase it to over 1100 kg/Ha/Yr in five to six years and hence, the total rubber production in Cambodia from 97000 Mt in 2014 to 145200 Mt in 2016 and over 200,000 Mt last year; which is nearly three times the total rubber production of Sri Lanka at present.

Cambodians followed the recommendations of Sri Lankans with good faith and were able to treble their rubber production in less than 8 years. Why not plantation companies in Sri Lanka too, plan to follow the RRI recommendations to increase the rubber production to reap the benefits of the IRSG predicted attractive higher price of rubber after 2019. This is the time that people of SAARC countries to be concerned about the environment; because the world weather forecast centre reported last week that in 2100, the temperature of India, Pakistan, Sri Lanka and Bangladesh will rise by 2 degrees Celsius. If no attempts are made now itself by SAARC countries, what will happen to the productivity of all our agricultural crops and the fish population in the ocean?

It is universally accepted that the contribution from NR plantations to the environment is equal to the contribution from the natural forest. NR plantations help to minimize Green House effect by sequestrating 10 Mt of Carbon dioxide gas per hectare per year unlike other agricultural crops. Hence, those RPCC converting low yielding rubber lands into oil palm, as a result of poor management and bad exploitation techniques followed, should be concerned of the ecological effect of the conversion of rubber estates to oil palm in this small island where we only have 18% forest cover. But, to meet the edible oil requirement, oil palm could be planted in other unused lands in the wet zone; but not in lands reserved for rubber. The Ministry of Environment too should focus more on this potential danger and take adequate measures to rectify this problem to protect the country from turning into a desert.


Eugine Fernando

Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

According to Today's Cabinet announcement there are lot of  reliefs have granted to plantation sector. GL

144PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Thu Dec 19, 2019 9:13 pm



Half of the plantation companies dead now. Its too late for the government support.

145PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Thu Dec 19, 2019 10:00 pm


Manager - Equity Analytics
Manager - Equity Analytics

Plantation companies are doing only harvesting. When harvesting over government bailout . government take over replating cost or take over the business and replanting using public taxpayers money and again privatize.  Very Happy


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

[size=40]10-year strategic plan in the making to boost tea industry

By Charumini de Silva
A 10-year strategic plan and roadmap is in the making under a public-private sector collaboration to boost tea industry. PLANTATION SECTOR - Page 6 Image_cb191f61b3

The newly-appointed Sri Lanka Tea Board Chairman Jayampathy Molligoda told the Daily FT that the emphasis of the initiative is to make the tea industry sustainable and boost exports.

“The tea industry has taken the leadership to formulate strategic initiatives to put Ceylon Tea on top of the world map. This is a 10-year road map to support all stakeholders of the sector with an integrated system and consistent policy direction,” Molligoda said.

He said ‘Road Map Ceylon Tea 2030’ will be the main document the industry will depend on going forward once fully formalised.

Since assuming duties two weeks ago, Molligoda said several discussions were held between all stakeholders of the tea industry to understand the issues, challenges, opportunities and share new ideas to develop the 150-year old industry that continues to contribute significantly to the economic development of Sri Lanka.

Sri Lanka produces around 300 million kg of tea annually and earn about $ 1.6 billion in foreign exchange.

Molligoda who was previously the Deputy Chairman of Bogawantalawa Tea Estates PLC noted that Sri Lanka produces about 5.4% of the world tea production, which is inadequate considering the competition hence necessary changes are required.

“Sri Lanka used to supply around 8% of the world’s tea production 10 years ago. Our current supply has come down to 5.4%. For us to be competitive, the current model needs to be changed. The current model consisting of plantations, smallholders, factories and auctions need to be relooked at to improve efficiency, reduce costs to be productive and competitive and more innovative in order to make the industry better, to support the local community to maintain the sustainability of this industry. We need a clear strategy for the industry,” said Molligoda.

Reiterating that Sri Lanka is in the right direction, the new Tea Board Chief who is a chartered accountant and certified management accountant by profession said it was important for the industry to understand global market trends, competitors and develop Pure Ceylon Tea with its exclusivity and value additions to ensure that it can be promoted as a top beverage among the world.

The annual global tea market growth is approximately 5.5%. 

PLANTATION SECTOR - Page 6 Image_153fb474fcAccording to Molligoda the initiative is also supported by the Plantation and Export Agriculture Ministry. 

Tea Exporters Association (TEA) Chairman Jayantha Karunaratne told the Daily FT that the formulation of the policy document was a brainchild by Colombo Tea Traders Association of Sri Lanka (CTTA) where all stakeholders including regional plantation companies, tea factory owners, brokers, tea smallholders are a part of.

“Basic foundation has been set. We have started working on this and the interim report will be submitted to Sri Lanka Tea Board and the Ministry by January,” he added.

It was pointed out that with livelihood of over 2 million people dependent on the tea industry, remaining competitive in the international market was a key challenge.

Last week the Plantation Industries Ministry said the Government will implement a major loan restructuring plan for the tea sector which could include a moratorium on loan repayments and the write-off on interest in some cases. 

The relief measures for the tea sector was approved by Cabinet with the modalities on how the proposed measures are to be implemented to be finalised in the weeks ahead.

The Government will also take Rs. 500 million from the Tea Promotions Fund to give loans to factory owners via a scheme to be implemented through the banks.

The National Sales Average (NSA) for tea during January-November was Rs. 542.34, down Rs. 40.21 from Rs. 582.55 in the corresponding period of last year. The dip was despite the NSA for November improving by Rs. 44.24 per kg to Rs. 569.67 from October but lower by Rs. 14.91 from November last year.

Both the month and cumulative averages show a greater decrease in dollar terms compared to the corresponding period of 2018 due to the devaluation of the rupee.

In October earnings from tea exports declined 1.5% to $ 113.8 million due to lower average export prices in line with the fall in international market prices despite an increase in export volumes. In the first 10 months of 2019, tea exports were down by 5.7% to $ 1.14 billion.

In terms of production, January-October tea crop amounted to 253.7 m/kgs recording a marginal gain of 0.98 m/kgs vis-à-vis 252.7 m/kgs of January-October 2018. In October crop totalled 20.8 m/kgs down by 8.9 m/kgs from a year earlier. All elevations have recorded a decrease YOY, with High and Low Grown elevations showing a fairly significant decline

147PLANTATION SECTOR - Page 6 Empty Sorry to plantation companies Tue Jan 14, 2020 11:07 pm



1000 rupees wage hike, of course i agree behalf of innocent people but the pay is very high. In india per day pay 380 rupees sri lankan money, even Thailand and Malasia has cheap labour. We are the highest in the region of course our unit cost will increase

148PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Tue Jan 14, 2020 11:11 pm


Associate Director - Equity Analytics
Associate Director - Equity Analytics

bounce bounce bounce bounce bounce

149PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Wed Jan 15, 2020 1:25 am



I have to revise my WATA and RICH target. You can collect BALA @ 8

150PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Wed Jan 15, 2020 10:18 am


Vice President - Equity Analytics
Vice President - Equity Analytics

plantation sector do not grow fast. SL have to shift for machinery to have big profits (like usa)

151PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Wed Jan 15, 2020 4:50 pm


Associate Director - Equity Analytics
Associate Director - Equity Analytics

Very Happy

152PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Wed Jan 15, 2020 4:54 pm


Equity Analytic
Equity Analytic

This will delay the hopes for a plantation rally  Sad

153PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Wed Jan 15, 2020 7:32 pm


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Teller wrote:I have to revise my WATA and RICH target. You can collect BALA @ 8

Will it fall that much? even when all time low is 9.20/= Surprised

154PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Fri Feb 21, 2020 12:14 pm


Manager - Equity Analytics
Manager - Equity Analytics

Sri Lanka’s listed plantations lose Rs2.6bn in six months ahead of mandated wage
Friday February 21, 2020 11:07:10

ECONOMYNEXT- Sri Lanka’s publicly traded plantations companies, growing commercial crops such as tea, which have been asked by the government to pay higher wages to workers have lost 2.6 billion rupees in the six months to September amid erratic weather and low commodity prices.

The plantations represented by the Planters Association of Ceylon are now negotiating with the government on how to pay a wage floor of 1,000 rupees a day mandated by the cabinet of ministers.

Government spokesmen have said a wage supplement from the Treasury or some other support may come.

Publicly listed plantation firms have posted losses totaling 2.26 billion rupees for the six months ending September, interim accounts show.

Revenue at regional plantation companies (RPCs) fell 3.6 percent to 28.47 billion rupees in the six months to September, while cost of sales grew 3.2 percent to 28.8 billion rupees, leading to losses at gross margin levels.

The plantations were privatized in the mid-1990s, after running large losses and the Treasury was forking out 400 million rupees a month to pay wages.

Despite the losses, plantation stock prices have risen 3.4 percent from end-March to end-December, although the entire stock market had risen 10.3 percent during the same period with elections and a general rise in business confidence.

Companies that produce tea, which is most labour intensive, usually suffer bigger losses than firms that have more rubber and oil palm. Oil palm is tax protected and tends to draw higher prices and is also less labour intensive.

Rising Costs

Excessive rains have pushed up operating costs in 2019.

“It has been a challenging year for all tea producers,” Planters’ Association of Ceylon Spokesperson Roshan Rajadurai told EconomyNext.

“Plantations were severely impacted by unfavorable weather. Excess rain brought with it additional costs like more chemicals to fight fungal growth, weeds and other problems like soil erosion.

“This condition made plucking harder since workers couldn’t pluck if the ground was too wet.”

Costs have meanwhile also been escalating amid constantly rising wages over the past decade.

Plantation wages grow every two years, following collective agreements signed between RPCs and labour unions.

Wages were last revised in 2019, when the wages were set at 700 rupees a day with a 50 rupee price supplement, increasing from 500 rupees, which had collectively increased costs by 9 billion rupees for all regional plantations companies.

However, the current government has forced a wage high a year earlier, after ordering the planters to hike the minimum wage to 1,000 rupees by March 01.

Research at the Institute of Policy Studies, a leading think tank, shows that under the 2019 wage agreement, plantation workers are paid 3,055 rupees below a ‘living wage’.

A living wage is defined as the ability to procure basic nutrition, water, housing, education, healthcare, and transportation.

Plantations workers usually reside inside an estate are given some additional facilities.

Wage Model

Rajadurei said there is a need to move from the current attendance-based model, in which workers are paid for attending 25 days even if they do not work a full day, to a productivity-based model.

He said RPCs private companies, plantations and trade unions had already agreed to migrate into a revenue cum productivity model by abandoning the daily wage model.

Other countries have already transitioned into productivity based models which gives better incentive to workers and boost productivity, he said.

“The bottom-line is, ours is an industry which is highly regulated on labour but we do not receive a compensating output from our labour force,” Rajadurai said.

“However, at the end of the day, producers remain unsatisfied as we are only price takers and have no other option but to sell at the auction price.”

Under longstanding rules Sri Lanka tea farms have to put up their produce for auction preventing the development of regional brands, some sector analysts have said.

Some tea companies are now selling limited quantities of tea directly, developing international and local marketing skills and brands.

In Sri Lanka workers pluck 16-18 kilogram’s a day, and if they pluck over 18 kilogrammes they are paid an ‘over-kilo’ rate to reward productivity.

Meanwhile in Kenya and India, pluckers average 36-60 kilogrammes a day, and get paid an over kilo rate for plucking above 24-40 kilogrammes.

Critics have blamed plantations for not innovating on production techniques to lower costs as well as downstream supply chains to boost revenue.

Price Takers

Tea prices goes through cyclical commodity price booms and busts, along with other food commodities sometimes linked to Federal Reserve monetary policy.

In Sri Lanka the rupee price may pick up due to currency depreciation. In 2018 the rupee fell from 153 to 182 to the US dollar amid liquidity injections.

A weak dollar tends to push up prices of commodities while tighter policy which contracts credit tends to push down commodity prices measured in nominal currency, analysts say.

The Colombo auction average had fallen from 637.75 rupees a kilo (4.16 US dollars) in January 2018, to 512 rupees a kilogram (2.88 dollars a kilo) by September 2019.

Prices have picked up to 588.8 rupees a kilo (3.17 dollars) by January 2020.

Rajadurei said buyers at the tea auction were not offering good prices for tea leaves, although the buyers were getting premium prices at the world market for their brands.

“We have to deal with the risks of climate change and rising wages, but we are price takers at the auction,” he said.

Tea Board Chairman Jayampathy Molligoda said it is “an integrated productivity and quality problem.”

“We have noticed a gradual decline in quality of the green leaf. The good leaf count, which has come down, needs to increase subsequently.”

Auction prices fall if the plucked leaves are of lower quality.

“If the quality of raw material continues to deteriorate, we are in trouble,” Molligoda said.

Planters in Sri Lanka believe that the ‘Ceylon Tea’ brand would ensure survival of the industry.

However, traditional tea brewing is facing severe competition globally with blended ready-to-drink beverages such as iced-tea and drinks with tea extracts gaining popularity.

Molligoda said Sri Lanka’s planters cannot hold on to a belief that the Ceylon Tea brand will continue to provide dividends.

“People are no longer interested in the country of origin as long as the quality of tea is maintained,” Molligoda said.

“It has come to a point where we have to ask all industry stakeholders to adhere to the parameters of raw material standards.”

“Regarding the price factor, yes there is some truth to the price taker mindset in the context of this commodity trap.”

“However, you cannot generalize because you do receive a higher price if the quality is maintained,” Molligoda said.

Kenya, which had overtaken Sri Lanka as the top tea exporter in the world with CTC (crush, tear, curl tea) is now attempting to break through into the orthodox black tea Sri Lanka is famous for.

Sri Lanka tea industry is now trying to prevent stakeholders from losing out through new plans and reforms maximizing quality and productivity in the product.

“The CTTA has given a roadmap and the Chamber has also contributed with plans, thereby we are hopeful for this new year to turn out better than the last,” Rajadurai said.

The new tea industry roadmap for 2030 envisions growing export earnings to 3.5 billion US dollars after fluctuating between 1-1.6 billion rupees between 2007 and 2018. (Colombo/Feb21/2020)

155PLANTATION SECTOR - Page 6 Empty Re: PLANTATION SECTOR Fri Feb 21, 2020 1:28 pm



We can not pay upto 1000 rupees per a day. Its a bullshit decision. india still pays 345 rupees for a day.

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