COLOMBO (EconomyNext) – The collapse in commodity prices have cause such severe losses at Sri Lanka’s regional plantation companies that some of them have to be supported by their parent firms through cash infusions, industry officials said.
The Planters’ Association, which represents 20 regional plantation companies growing tea, rubber and oil palm, said their collective losses were 3.4 billion rupees in 2014.
PA Chairman Roshan Rajadurai said the downturn in tea and rubber prices had been steep and sustained, a phenomenon not experienced before, owing to political and economic problems in key markets like Russia and the Middle East.
“We are finding it difficult to pay wages,” he told a news conference held to discuss talks with labour unions demanding higher wages with the renewal of their collective agreement.
Secretary General Malin Goonetileke said most RPCs have deficit cash flow every month.
“The parent companies are pumping money to bridge the deficit. They have gone to banks and borrowed.”
The PA said it was trying to get relief from the government and had asked for concessionary long term funding.
The government Thursday announced a subsidised loan scheme for tea factories.