Spokesperson for the Planters Association of Ceylon Roshan Rajadurai states that tea production has declined by 23%, and that tea small holders will be forced to leave the trade as they will be unable to pay the the wages due to the pay hikes.

He further stated that it has caused a decline in demand for Ceylon tea in the world market by about 5-10 % and that some orders were even cancelled and awarded to other countries.

He added that an appeal has been lodged with the Supreme Court asking for a reprieve regarding increasing the wages and if they do not receive it, they would be paying the increased wages on 10 July.

The production cost of a kilo of tea leaves is Rs. 1,092 and with the increased wages it’ll rise to Rs. 1,450. Last year (2023), a kilo of Ceylon tea was sold at the world market at Rs. 1,072.

If the world market price for Ceylon tea goes up to Rs. 1,500 and the harvested tea per tea plucker goes up to 27kg per day, the increased wages could be paid without any problem, the spokesperson added.

He cited India’s Assam state as an example, stating that it produces 600 Mn kgs of tea per year and that each tea plucker harvests 34 kg per day. A Sri Lankan tea plucker in comparison harvests 18 kg per day.

Reduction of working days 

Meanwhile, reports also state that plantation companies are preparing to reduce the number of working days of estate workers.

The wage increase were gazette, raising it to Rs. 1,700 and payable from 21 May. Up country estate workers state that it has not been added to their May salary.

The Planter’s Association filed a petition at the Supreme Court asking for the cancellation of the gazette however, the injunction order was rejected by the court. Thus, plantation trade unions state the increased wages should be paid from 21 May onwards. The Plantation owners say that it will be paid from 10 July if ordered by court.

Meanwhile, a tea factory linked to the government has paid its workers the increased wages on 10 June. It is said that they received funds for it from the treasury.

ILO praise for wage hike 

Meanwhile, the Director General of the International Labor Organization Gilbert F. Houngbo praised Sri Lanka for increasing the wages of estate workers by 70%.

In a press release Labour Ministry states that a discussion was held between the Labour Minister and the ILO Director General  on 10 June, during the annual International Labour Conference held in Geneva.