Jacintha Malar, a tea factory employee in Sri Lanka, has transitioned from using cooking gas to firewood for her family meals due to rising energy prices stemming from the ongoing conflict in the Middle East, which has negatively impacted the country’s tea sector.
Malar and her husband, who works as a tea plucker in the central hills of Sri Lanka, are part of a workforce heavily reliant on the nation’s tea industry, valued at $1.5 billion and employing approximately 2.4 million individuals.
Workers like Malar are increasingly facing challenges resulting from the Middle East situation, as nearly 50% of Sri Lanka’s Ceylon Tea exports, amounting to about $680 million annually, are directed towards that region.
The daily wages for tea plantation workers range between 1,350 and 1,750 rupees (approximately $4.30 to $5.50), which is only slightly above the national minimum wage of 1,200 rupees.
More than half of these workers live below the World Bank’s international lower-middle-income poverty threshold of $3.65 per day.
“Plantation workers are enduring one crisis after another,” stated Thangawel Ganeshalingam, who leads the Movement for Plantation People’s Land Rights, an organization affiliated with around 200 plantations. “Rising costs have led to increased school absenteeism, reduced meal consumption, and some workers are leaving the plantations in search of better opportunities in urban areas.”
In March, tea export revenues dropped by 17.3% compared to the previous year, totaling $114.75 million, as reported by the state-run Export Development Board (EDB).
Exports to Iraq, the largest importer, saw a decline of 38%, while shipments to the United Arab Emirates plummeted by 93%, according to EDB statistics. Iran typically imports between 8 million and 10 million kilograms of premium Sri Lankan tea each year.
Dilmah, known for its Ceylon tea brand available in 108 countries and relying on the Middle East for about 30% of its business, is encountering logistical and shipping challenges, prompting a shift towards markets in Canada, South America, and the United States.
“We have managed to absorb costs up to this point, but rising fuel prices and their impact on logistics—from Perth to Melbourne or Colombo to Dubai—are contributing to inflation across the board,” remarked Dilhan Fernando, chairman and CEO of Dilmah Ceylon Tea Company PLC.
The disruption in the tea industry could exacerbate Sri Lanka’s economic situation, which is already struggling due to the conflict’s impact. In response, the government has raised fuel prices by 40%, imposed supply rationing, and designated Wednesdays as public holidays to conserve energy.
For Malar, the prospect of a prolonged conflict in the Middle East is concerning as she already faces difficulties in making ends meet. “We don’t know how we will manage. If this war continues, many will experience hardship,” she expressed.
