The Planters' Association of Ceylon has called for an urgent review and rationalisation of plantation sector cost structures amid escalating geopolitical tensions in West Asia and disruptions linked to the Strait of Hormuz, warning that the developments pose a serious threat to Sri Lanka’s tea export economy.
The Association noted that nearly 45% of Sri Lanka’s annual tea exports — valued at approximately USD 680 million out of the country’s total USD 1.5 billion tea export revenue — are generated from Middle Eastern markets including Iran, Iraq, the UAE and Saudi Arabia. Given the strategic importance of these destinations for Pure Ceylon Tea, the industry has expressed growing concern over emerging supply and demand-side pressures affecting the sector since the beginning of the year.
According to the PA, the combination of rising operational costs, global uncertainty and weakening market conditions is creating unprecedented challenges for both Regional Plantation Companies (RPCs) and smallholders engaged in tea and rubber cultivation.
The Association highlighted that wages currently account for nearly 70% of the total cost of production in both tea and rubber, while expenses related to fuel, fertiliser, chemicals, firewood, packing materials and other inputs make up the remaining production costs.
The PA also noted that plantation sector wages have long remained a contentious issue within the industry. While Regional Plantation Companies have consistently acknowledged the importance of improving worker incomes, the industry has repeatedly advocated for financially sustainable wage mechanisms that take into account Sri Lanka’s comparatively high production costs and lower productivity levels.
The latest plantation wage increase, which came into effect on 1 January 2026, has further intensified pressure on the industry at a time when export markets are facing growing uncertainty.
Following the end of state-managed plantation operations and the privatisation reforms introduced in 1992, plantation sector wages have traditionally been determined through collective agreements involving RPCs, trade unions and the Employers' Federation of Ceylon.
AHC Group Partners with Asia Africa Chamber to Boost Investment and Global Collaboration
AHC Group has entered into a strategic partnership with the Asia Africa Chamber of Commerce and Industry through the signing of a Memorandum of Understanding (MoU), marking a significant step towards enhancing international trade, investment and economic collaboration.
The agreement was signed recently at the Heritance Negombo between Dr. Nalaka Silva, Chairman of AHC Group, Co-Founder of the International Chamber of Agricultural Plantation Industry and Farmer Producer Organization (ICAPIFPO) and Ambassador of Peace, and Dr. G.D. Sing, President of AACCI.
The partnership is expected to facilitate investment inflows into several key sectors including agriculture, tourism, imports and exports, real estate, geology and mining. The initiative is also anticipated to create new employment opportunities while contributing to Sri Lanka’s broader economic growth and development agenda.
Speaking on the collaboration, Dr. Nalaka Silva stated that AHC Group continues to play an active role in advancing Sri Lanka’s agricultural sector through sustainable and innovation-driven initiatives. Among the company’s flagship projects is its vermicompost organic fertiliser programme, which has gained increasing recognition among vegetable, fruit and flower growers across the country.
The Group has also commenced large-scale seed paddy cultivation across nearly 1,000 acres in the Tissamaharama and Ampara regions, with the objective of supporting local farmers, improving agricultural productivity and strengthening food security.
Dr. Silva further invited the public to engage with AHC Group’s investment initiatives, emphasising the company’s commitment to transparency, trust and long-term value creation. He expressed confidence that the agreement with AACCI would create significant economic opportunities for Sri Lanka while strengthening international business linkages.
In line with these efforts, AHC Group and ICAPIFPO are preparing to host a major international workshop and conference in Sri Lanka this August. The event, organised by the Global India Business Forum in collaboration with ICAPIFPO and AHC Group, is expected to attract business leaders, industry experts and professionals from more than 25 countries.
More than 25 ambassadors and high commissioners are also expected to participate, highlighting the event’s international significance. According to Dr. Nalaka Silva, the conference will serve as an important platform to create new global opportunities for Sri Lankan entrepreneurs and businesses, with further details expected to be announced through official channels in the coming weeks.
Planters Call for Coordinated Action to Stabilise Tea Production and Export Markets
