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Ceylon Planters Association spokesman Roshan Rajadurai said tea production had fallen by 23% and small tea farmers would be forced to exit the industry as they would not be able to pay their salaries due to the wage hike.
He further said that this has led to a drop in demand for Ceylon tea in the world market by about 5-10% and some orders have even been cancelled and diverted to other countries.
He added that they have appealed to the Supreme Court for a stay on the salary increase and if it is not approved, they will pay the increased salary on July 10.
The production cost of one kilogram of tea is Rs 1,092 and with the increase in wages, the cost will rise to Rs 1,450. Last year (2023), one kilogram of Ceylon tea was sold for Rs 1,072 in the international market.
The spokesman added that if the international market price of Ceylon tea rises to Rs 1,500 and the quantity of tea plucked by each tea picker increases to 27 kg per day, the increased wages can be paid without any problem.
He cited the example of Assam in India, which produces 600 million kg of tea every year, with tea pickers picking 34 kg of tea a day, while Sri Lankan tea pickers pick 18 kg of tea a day.
Reduce working days
Meanwhile, reports say plantation companies are preparing to reduce the working days of plantation workers.
The wage hike, which has been published in the government gazette, amounts to Rs 1,700 and will be paid from May 21. Up country estate workers said the money was not added to their May wages.
The planters’ association filed a petition in the Supreme Court seeking de-gazettement, but the court dismissed the injunction. As a result, the plantation union said the increased wages should be paid from May 21. The planters said they would pay from July 10 if the court ordered it.
Meanwhile, a tea factory linked to the government has paid the increased wages to its workers on June 10. They are said to have received the funds from the state treasury.
ILO praises wage rise
Meanwhile, ILO Director-General Gilbert Houngbo praised Sri Lanka for increasing wages for estate workers by 70 percent.
The labour ministry said in a press release that the discussion took place between the labour minister and the director-general of the International Labour Organisation on June 10 during the annual International Labour Conference in Geneva.
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