On paper, Sri Lanka still ranks among the top tea-exporting countries in the world. But behind the numbers, the story is less reassuring.
At auctions, prices struggle to stay competitive. In the fields, the hands that have kept the industry going for generations are thinning out. And on the global stage, India has now overtaken us in export volume, a move that many in the industry saw coming but hoped to outrun.
This is the result of years of unresolved issues such as rising costs, stagnant productivity, labour shortages, and a reluctance to adapt. While other producers have tweaked their models and pulled ahead, Sri Lanka remains attached to a system that no longer matches the market. The result is a slow drift and a steady slide that is becoming harder to ignore.
Replanting is possible, but who will do the plucking?
Speaking to The Sunday Morning, Planters’ Association Spokesperson Roshan Rajadurai outlined the situation. “Yes, that is correct,” he said when asked whether Sri Lanka risked losing more market share if current inefficiencies remained unaddressed. “Our prices are high, even compared to the best of Kenyan teas.”
According to him, Kenyan teas are being sold at around $ 2 to $ 2.5 per kilo, while Sri Lanka’s minimum price at auction sits at around Rs. 1,200. The key reason, he noted, was low productivity. “People talk about low productivity as if it’s vague, but it’s a function of output,” he said. “If 20 people bring in 20 kilos, and the same number can bring in 40 kilos, that’s the gap we’re talking about.”
Rajadurai pointed to India’s Assam region as a telling comparison. While conditions there are tougher, with poorer soil and less rainfall, pluckers average around 34 kg per day. In Sri Lanka, he said, many bring in just half of that. “They are paid about INR 232 a day. Even if you convert that to around Rs. 750, we are paying close to double for half the output.”
He stressed that this cost imbalance became even more critical in a global market where tea competed as a basic commodity. “This isn’t gold or oil. People can go without tea. There are plenty of alternatives like coffee.”
While global demand for tea remains steady among working-class consumers, especially in developing countries, it is increasingly being edged out of premium markets. “A farm worker, a mason, or a driver will still have tea during a break because it’s affordable. But a middle-class professional will pick coffee if given the choice,” Rajadurai observed. “That difference in consumption patterns matters.”
At home, structural issues within the supply chain have deepened the problem. Around 75% of green leaf production now comes from smallholders, but their yields often fall below plantation-managed estates. Despite being located in warmer zones with better rainfall, smallholder fields are not producing at expected levels.
“Some estates with 100% vegetatively propagated tea are getting 1,200 kg. That should be higher. But smallholders, despite having better conditions, are still trailing behind,” he said.
Rajadurai believes that the way forward lies in restructuring the labour model. He has long advocated for a revenue-sharing system, where workers take responsibility for specific plots, harvest on their own terms, and are paid by results rather than time.
“We have been promoting this model for over 10 years. Most companies have adopted it. Otherwise, they would have closed long ago,” he said. In areas where regular harvesting is not possible due to labour shortages, estates now offer sections of land for workers to manage independently. The workers pluck, maintain, and sell leaf back to the estate at a premium.
“It works for everyone,” he said. “They earn more. We get better leaves. And those who don’t want to be called estate workers prefer this setup because they work on their own terms.”
Within his own company, Rajadurai said that 30-40% of the workforce now earned more than double the minimum wage through this model. Some even combine regular employment with part-time harvesting of allocated plots. “It suits the rhythm of agriculture. You work hard and you earn. That’s how it should be.”
He also acknowledged that generational change was affecting the industry. Decades ago, smallholders were closely involved with their plots. Today, many of their children are in clerical or Government jobs. “They are not coming back to pluck tea. So they hire someone else, pay Rs. 50 per kilo, and the work gets done. That’s how the new supply chain works.”
Despite all this, Rajadurai expressed frustration with the persistent focus on replanting as the main solution. “You can replant as much as you want, but if there’s no one to pluck, what’s the point?” he questioned. “We already can’t manage the bushes we have. Why add more without fixing the labour issue?”
He further expressed his belief that political hesitation was standing in the way of widespread reform, noting: “There’s no will to say, ‘This is the way forward, let’s do it.’ In the meantime, the organised plantation sector is quietly adapting. Without these changes, many of us would have shut down years ago.”
Under strain from several directions
“We are under a lot of pressure,” National Chamber of Exporters (NCE) President Jayantha Karunaratne stated, citing both international and local forces. “But this won’t lead to an immediate crisis. Still, there are problems that need to be addressed.”
Karunaratne acknowledged the recent drop in global tea rankings, with India overtaking Sri Lanka in export volumes, as a concerning but not surprising development. He explained that the industry was under strain from several directions, including pricing competitiveness, production costs, and shifting expectations among the workforce.
“There are different pressures depending on the industry. For tea, we have to deal with both global competition and domestic issues,” he said. “It’s not a major problem yet, but if these things are not dealt with, it could become one.”
One of the more immediate concerns, according to Karunaratne, is the Government’s plan to remove the Simplified Value-Added Tax (SVAT) from October. The move, he warned, would directly increase the cost of operations for exporters and could undermine the price competitiveness of Sri Lankan tea in global markets.
“This will raise our costs, and if our pricing suffers, our exports will take a hit,” he said.
Labour, too, remains a persistent challenge. When asked about industry concerns around workforce availability, Karunaratne did not hesitate. “Lack of labour is a problem we have been facing for many years,” he said. But he also pointed out that the issue was not just about numbers; it was also about evolving expectations.
“You can’t expect people to do the same thing every day without offering them better wages, better working conditions, or at least some form of social recognition,” he explained. “The industry also needs to change the way it works.”
Karunaratne recalled a time when the industry operated under an entirely different model. “Thirty years ago, the workforce was different. The environment was different. Now the people are different. You can’t ask them to work under the same setup and expect the same results.”
He argued that the tea sector must stop relying on outdated assumptions about its labour force. “People are changing. Society is changing. And the industry has to change with it if we want to stay in the market.”
Every sector, he said, must acknowledge how work was changing.
EDB pursues ‘multi-pronged strategy’
According to Export Development Board (EDB) Chairman Mangala Wijesinghe, the board is pursuing a multi-pronged strategy focused on market access, policy coordination, and long-term planning.
“We are implementing a comprehensive and professional support framework to empower tea exporters and sustain their growth in the global market,” Wijesinghe told The Sunday Morning. “Our approach includes structured market support, continuous engagement with exporters, high-level policy coordination, and targeted business matchmaking.”
One of the core areas of focus is building direct connections between Sri Lankan exporters and overseas buyers. Through dedicated Business-to-Business (B2B) meetings, the EDB facilitates introductions that allow exporters to showcase their products, explore new market opportunities, and establish long-term trading partnerships. These events, Wijesinghe explained, were designed to help expand Sri Lanka’s global export footprint in practical, commercial terms.
At the same time, the EDB is investing in exporter readiness. “We disseminate market alerts, conduct capacity-building programmes, and organise webinars in collaboration with Sri Lankan missions overseas,” he said. “These initiatives help exporters stay informed and quickly adapt to changing global market conditions and regulatory environments.”
Domestically, the EDB is working to strengthen exporter engagement through the Exporters’ Forum, which is held once every three months. The forum brings together exporters, private sector representatives, trade associations, and relevant Government institutions.
According to Wijesinghe, this creates an essential platform for policy dialogue and problem-solving. “We see it as a space where operational and strategic concerns can be addressed collaboratively and channelled into policy advice for the Government,” he said.
In terms of long-term vision, the EDB is preparing the groundwork for a five-year export development strategy. With backing from the Asian Development Bank, the board has launched the National Export Development Plan (NEDP) for 2025-2029. This new plan builds on the previous National Export Strategy (NES) that ran from 2018 to 2022 but adopts a more targeted, data-driven approach.
“The NEDP focuses on technological innovation, regulatory reform, and sustainability integration,” Wijesinghe explained.
Need to promote in markets we already have
According to Sri Lanka Tea Board (SLTB) Chairperson Raaj Obeyesekere, the board’s upcoming focus will include improved mechanisms for production oversight and renewed efforts to market Ceylon Tea in existing and potential markets.
Speaking to The Sunday Morning, Obeyesekere said that investment would be directed towards both “developing production and regulatory mechanisms, as well as in promotion”. The aim, he said, was to create a more resilient industry while also boosting global demand.
A central component of the plan was an expansion of promotional activities, which Obeyesekere said would be rolled out over the next few months. While specific strategies are still in the early stages, he confirmed that the groundwork was already being laid.
When asked about which markets the board intended to target, Obeyesekere said the immediate priority would be to strengthen visibility in countries where Ceylon Tea was already established. “At present, we have to promote in the markets we already have,” he noted. “However, if there are any new markets, we will look at them as well.”
Govt. response
Deputy Minister of Trade R.M. Jayawardana stated that the Ministry of Trade was not directly involved in the promotion of tea exports, noting that such responsibilities fell under the purview of the Ministry of Industry.
“The Ministry of Industry must be doing some promotions, but at our ministry, there is nothing going at present and we are proceeding as usual when it comes to the tea trade,” he said.
Minister of Industry and Entrepreneurship Development Sunil Handunnetti was not available for comment. The Sunday Morning also reached out to the Minister, Deputy Minister, and Secretary of the Plantation and Community Infrastructure Ministry under which Sri Lanka Tea Board falls, but none of them were available for comment.