Sri Lanka tea crop hit by heavy rains

July 09, 2013 (LBO) - Sri Lanka's tea crop has been hit badly by heavy rain in June with some estates seeing production falling to less than half and losses in some firms mounting to 100 million rupees, an industry association said. The Ceylon Planters' Association of Ceylon, representing about two dozen large firms said due to high labour costs and low volumes the cost of production was now about 700 to 735 rupees per kilogram of made tea while the average auction price was 325 rupees.

Some companies have lost about 100 million rupees last month, the PA said.

The PA said estates in Nuwara Eliya, Hatton, Dickoya, Agarapatana and Talawakelle areas the crop intake has fallen to 40 to 45 percent of the average.

"Buyers must take note of this critical situation that is prevailing," a PA statement quoted Senarath Pahathkumbura, general manager, Elpitiya Plantations Plc as saying.

He said a wage hike in April which had incentives to improve crop was not having an effect due to bad weather.

Rains are the heaviest in 47 years, John Keells Plc, a tea brokerage in Colombo said.

"Due to the cold and wet weather experienced, the crop intakes have come down drastically," John Keells told in a report to clients.