STiR coffee and tea magazine

10 STiR coffee and tea / Issue 3, 2022 (June / July) epercussions of a tumultuous spring rise as Sri Lanka suspended its tea auc- tion due to economic upheaval; India bypasses sanctions by resuming tea shipments to the Russian Federation, and Covid-19 lockdowns delay ship- ments from China by an average of 74 days. Violent protests and economic uncertainty forced the Colombo Tea Traders As- sociation to cancel its May 10 tea auction, postponing sale No. 18. Representatives of 38 export sectors valued at a combined $16.7 billion estimated an overall decline of 20- 30% in exports since the economic crisis. Tea will likely sustain even more significant setbacks as spring yields falter. Russia and Ukraine purchase about 18% of the black tea produced in Sri Lanka. Planters say that a prolonged conflict will "severely" impact tea exports — dry weather compounding limited processing due to power rationing. Tea production declined by 15% in March. The war diverted essential tourism dollars from Russian and Ukrainian visitors (down 41% in April), and the foreign currency crisis and severe devaluation triggered record inflation leading to unrest. In May, politics injected additional complexity as new Prime Minister Ranil Wick- remesinghe replaced President Gotabaya Rajapaksa's brother following violent clashes with citizens protesting conditions. "This political crisis takes focus away from addressing Sri Lanka's daunting eco- nomic challenges, which must be given utmost priority to protect key sectors, employ- ment, and livelihoods," Jayantha Karunaratne, chairman of the Colombo Tea Traders Association, told the Sunday Observer. "The private sector is united in demanding an immediate solution from all po- litical parties and parliamentarians once we fully comprehend the dire and potentially catastrophic consequences that would be unleashed on the people and the country if parliamentarians and the government failed to act," said Rohan Masakorala, c.e.o. of the Shippers Academy Colombo. Foreign reserves stood at $50 million as Colombo officials met with ambassadors from China, US, Japan, and Britain in hopes of securing the World Bank's monetary support alongside emergency loans from the International Monetary Fund. Lakshini Fernando, head of macroeconomic research at Asia Securities in Colom- bo, told Bloomberg News that turmoil in the streets would "definitely" delay a bailout. "We're not at the bottom yet," he said, "It's going to get worse before it gets better." R Tea Woes: India Defies Sanctions; Sri Lanka Suspends Tea Auction By Dan Bolton Sri Lanka's predominately orthodox production requires 2.5 million pluckers that harvest about 40 pounds (18 kilos) of tea daily to make ends meet. Double digit inflation, nearing 50% for food, lengthy power cuts, and shortages of expensive fuel combined with falling yield led workers to protest in massive vigils that have become violent in recent weeks. Photo by Adobe iStock. "Tea exports to Russia have begun. We have just shipped five containers to Russia." — Mohit Agarwal, director of Asian Tea. Up Front

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