Sri Lanka tea farmers hurt by Middle East unrest

Feb 03, 2012 (LBO) – Sri Lankan small farmers are suffering because of a downturn in demand for tea from key markets in the Middle East owing to political unrest, an industry official said. Goonetilleke said 2012 had not started off well for the tea growers and factories producing low grown teas whose main market is in the Middle East.

“There’s no sign of the situation improving in the short term mainly due to the volatile situation in north Africa and Middle East compounded by the global financial crisis. Iran is also a major market for low elevation teas. As a result, our farmers far away from the arena of conflict suffer.” Neil Goonetilleke, of the tea factory owners association, said a prolonged downturn in the market might cause small holder growers, who are found mainly in the southern lower elevation parts of the island, to leave the industry.

“After four good years tea prices particularly for the lower elevation teas, has dropped sharply since the beginning of last year,” he told an international tea convention in Colombo.

Tea factories are also suffering trading losses owing to the drop in prices, he said.

“Also, there is undue competition and too many factories