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Sri Lanka tea firms lose 40-pct output, working with tight Covid-19 rules

ECONOMYNEXT – Sri Lanka commercial tea plantations which have thousands of workers per farm said they were operating with tight health rules amid curfews imposed to spread Coronavirus in the country while losing 40 percent of the output to drought in the last three months.

The firms were keeping sanitation practices and social distancing while all workers were issued protective equipment.

Meanwhile, all staff and worker dwellings, as well as factory premises will continue to be disinfected on a regular basis.

“RPC mangers and staff are also on the frontlines in order to ensure that all estate communities are safeguarded and supported through this unprecedented global pandemic,” PA Media Spokesperson, Roshan Rajadurai said.

“Despite the challenges, RPCs are fully committed to ensuring the health and safety of its employees.

“The PA and its members will also be carefully monitoring the situation as it develops, and will be ready to implement any further directives issued by the Government and health authorities on an urgent and immediate basis,”

“While work on the estates was halted by 13th March, as soon as the COVID pandemic worsened, most RPCs were able to resume work after only 4-days interruption,” Sunil Poholiyadde Chairman of the Planters’ Association which represents the biggest tea and rubber firms said.

“This was due to the remarkable initiative taken by the RPCs with the assistance of health authorities to institute stringent health and safety protocols, while ensuring that all workers and the wider estate community had their essential needs met.”

“The challenges around COVID-19 add to the already pressing difficulties of tea producers who have been facing an unprecedented drought for the past 3 months which is estimated to have caused as much as a 40 percent reduction in estate production.

“The loss in crop had already created an increase in the cost of production (COP).”

The Regional Plantations Companies have workforce of135, 000. Food rations were delivered to them directly. With many migrant workers having come back there is a population of about a million the PA said.

Sri Lanka has started e-auctions for tea and prices had moved up due to production fall of 40 percent currency depreciation. Rubber auctions had been delayed.

Currency falls would hit input costs, Poholiyadde said.

Sri Lanka’s central bank has the worst record among South Asian central banks in monetary stability with the steepest fall and its soft-pegged framework was weakened further recently by narrowing the policy corridor and targeting a call money rate with excess liquidity, analysts have said.

The resumption of auctions would ease some of the cash flow problems of the companies.

“The resumption of auctions has been an extremely welcome development for the rubber sector as well,” Poholiyadde said.

“Prices have remained at relatively similar levels to before the COVID outbreak; however we will need to pay careful attention here given the sharp declines which were seen in global oil prices.” (Colombo/Apr17/2020)