Estate worker unions expect quick close to wage talks; tea production hits new highs

Nov 02 (LBO) – Sri Lanka posted record tea production in September, as estate worker trade unions thrash out a wage increase for over 250,000 plantation workers. Wage Talks

Meanwhile, estate worker trade unions say they expect a quick closure in wage talks, with union officials downplaying strike action on some estates in Hatton over the weekend.

“The trade union action was only by a few people incited by some external elements for political gain. Work is continuing as normal on estates,” R Yogarajan, Vice President of the Ceylon Workers Congress (CWC), told LBO.

“Wage talks are continuing and we have had three sessions so far, with another scheduled for after November 10. We should be able to conclude talks in about three or four sessions.”

Trade unions are in the midst of thrashing out a wage hike under a three year collective agreement with plantation companies.

On average, tea estate workers earn a daily wage of 190 rupees. The fixed base rate is 135 rupees, with a guaranteed price share supplement of 20 rupees tagged on.

Estate employees also get a daily attendance incentive of 25 rupees if attendance is over 75 percent of the required 25 days a month. Workers also get a variable price share supplement pegged to the national sales average, which works out to about ten rupees

Wage talks in previous years have sparked off turmoil on estates, with trade union strikes and work stoppages, by unions demanding a better deal off plantation companies.

Tea production was up 15 percent to 27.76 million kilos, over last year’s 24 million kilos, driven by better than usual crop intakes from high grown elevations, Asia Siyaka Commodity Brokers said.

Production of high grown teas posted a massive 34 percent spike from 4.8 million kilos in September last year to 6.5 million kilos for the same period this year.

Low grown elevation teas also performed well, increasing by 12 percent to 17.6 million kilos a year from 15.6 million kilos last year.

Total tea exports for the year have reached 244.7 million kilos, up by 19 million kilos on last year, Asia Siyaka said, though exports in September were low.

“Total exports for the year have now reached 244.7 million Kilos. This figure is up 19 million Kilos or eight percent on the same period last year,” Asia Siyaka report says.

The industry also earned 656 million dollars in export revenues as at end September, over the 593 million dollars last year and higher than the 1998 boom year when earnings totaled 600 million dollars for the same period.

Despite the record highs in both August and September, Sri Lanka still needs to produce around 77 million kilos in the fourth quarter, if it hopes to get close to last year’s record intake of 314 million kilos.

Difficulties this year stemmed from low crop intakes in the second and third quarters this year, Asia Siyaka said, taking total production as at end September to 238 million kilos  two million kilos less than last year.

Losing Value

Exports of higher margin value added Sri Lankan tea however slipped 39 percent of total exports as top buyer Libya reduced purchases of tea in packs from Sri Lanka this year.

Exports of packed tea touched 58 million kilos this year, which is a four million kilo drop over last year’s 62.2 million kilos.

“Overall value added exports as a percentage of the total have declined to 39 percent compared with 41 percent last year,” Asia Siyaka said.

Top buyers of Sri Lankan tea include Russia, the United Arab Emirates, Syria, Iran and Turkey.