The Planters’ Association of Ceylon (PA) has called for an urgent review and streamlining of the plantation industry’s cost structures in the face of what it described as an “unprecedented” crisis in West Asia and the Strait of Hormuz, warning that 45% of Sri Lanka’s annual tea exports are now exposed.
In a statement issued on Thursday, the apex body of the plantation industry said roughly $680 million of Sri Lanka’s $1.5 billion in annual tea export revenue is generated from Middle Eastern markets — Iran, Iraq, the UAE and Saudi Arabia. The PA cautioned that even an immediate de-escalation of the Gulf conflict would not insulate the sector, because supply-side and demand-side shocks since the start of 2026 have stacked on top of pre-existing structural weaknesses.
Wages account for nearly 70% of the total cost of production in tea and rubber, the PA said. The most recent wage hike took effect on January 1, raising the daily wage by Rs. 400 to Rs. 1,750 — a Rs. 200-per-day government contribution and the balance from Regional Plantation Companies (RPCs). The PA noted this was the first time the state had subsidised a plantation wage hike, replacing the unilateral Wages Board mandates of 2021–24.
Fertiliser supply is the other immediate threat. With Hormuz disruption squeezing global fertiliser flows, the PA said uncertainty around input availability is putting the sector’s 300-million-kilogram tea production target for 2026 at risk. The body called for emergency action across four priority areas: securing fertiliser stocks, working capital support targeted at smallholders, strategic management of unsold tea stocks and accelerated diversification away from Middle Eastern markets toward higher-margin destinations.
The PA framed the present moment as a convergence of crises that have hit the industry over the past decade — ad-hoc fertiliser and chemical decisions by previous governments, the 2021 organic-fertiliser ban, COVID lockdowns, the 2022 economic crisis and most recently Cyclone Ditwah. “All of the previous constraints we faced may hit Sri Lanka simultaneously,” the statement said.
The Thursday call follows the PA’s April 10 warning of a second fertiliser crisis and broadens the framing from inputs alone to the export-demand side, where Iran, Iraq, the UAE and Saudi Arabia together absorb close to half of all Ceylon Tea shipments.
