‘Govt should pursue phased approach to organic fertilizer transition’ | Daily News

‘Govt should pursue phased approach to organic fertilizer transition’

Asia Siyaka Commodities says that the government should pursue a phased approach to transitioning to organic fertilizer, thereby mitigating the inevitable adverse impacts across the entire tea value chain.

Chairman -Asia Siyaka Commodities T Someswaran told shareholders in their Annual Report 2020/21 that they welcome the move by the government to move into the use of organic fertilizer. “However while acknowledging the good intentions of the chemical fertilizer ban, the government should pursue a phased approach to transitioning to organic fertilizer.”

The tea sector outlook for Sri Lanka may be dampened by the limited availability of fertilizer following the ban on chemical fertilizer which is likely to have a significant impact on production volumes, quality and yields of tea,” he predicted. He also said that Sri Lanka’s tea sector remained relatively resilient during the first and second waves of the pandemic, with operations continuing relatively uninterrupted.

“That said, inclement weather and unfavourable policy direction adversely affected the sector and is likely to threaten the sector’s survival and sustainability over the medium to long-term. Drought conditions during the first half of the year resulted in the country’s total tea production declining by 7% to 278.9 million kgs. during the year.”

On the other hand, the wage hike for plantation sector workers is expected to insert severe stress on both the RPCs and the tea smallholders, given Sri Lanka’s already high cost of production and relatively low productivity. The industry is already showing signs of impending stress, with over 20 tea factories and smallholders facing bankruptcy in the face of severe financial pressure. As industry stakeholders, we are deeply concerned about the socio-economic implications of these dynamics that are likely to impact Sri Lanka’s competitiveness in the global tea arena and threaten the livelihoods of thousands of people employed in the country’s tea sector.

Commenting on tea prices he said that they may moderate as global supply conditions improve over the short-to-medium term, reflecting a return to relative normalcy in Kenya and North India. Tea prices, however, remained attractive for most of the year, reflecting supply disruptions in India and Kenya and increased consumer propensity towards healthy beverages. Demand conditions are expected to be favourable, given the faster than anticipated recovery of advanced economies and increased prevalence for healthier beverages such as tea.

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