Tea Auction Weathers Crisis
Sri Lanka Tea Board in Colombo
In November Sri Lanka’s President Maithripala Sirisena fired Prime Minister Ranil Wickremesinghe, a native Tamil and UNP legislator from the central tea plantations.
A constitutional crisis ensued as Sirisena dissolved parliament and named former president Mahinda Rajapaksa to replace Wickremesinghe as prime minister.
A week later parliament passed a no-confidence motion against Rajapaksa’s government. The Supreme Court will hear arguments on the constitutional question.
Despite tension that involved street protests, the twice-weekly tea auction at Colombo, which is the largest in the world, continued normal operations. The auction moves 6.5 million kilos of tea a week.
The disruption did appear to delay a $25 million promotional campaign scheduled for October. The campaign targets tea importers in Russia, Japan, Turkey, China, and the US. It is unclear when the effort will resume.
Importers want the levy that finances promotions cut by half. Plantation Industries Minister Navin Dissanayake pledged to do so at the 19th Tea Exporters’ Association’s annual general meeting.
The global market share of Ceylon Tea has declined to 6% from 20% during the past 50 years, in part because of social unrest. Meanwhile, world consumption worldwide has expanded more than 20%.