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Sri Lanka to increase tea planting and replanting subsidy in 2021

09 Apr 2021

By Zahida Rizvi   The tea planting and replanting subsidies are set to increase from Rs. 400,000 to Rs. 500,000, and Rs. 500,000 to Rs. 630,000 per hectare, respectively, to enhance the crops available for export, The Morning Business learns. Speaking to The Morning Business, Sri Lanka Tea Board Chairman Jayampathy Molligoda, said that there is a necessity for a greater quantity of tea to be available at the Tea Auction to expand the Sri Lankan tea market internationally. “Thereby, this initiative would be beneficial for the tea industry, since the funds for re-planting are insufficient, and it takes about four years for a replanted hectare to generate income,” he added.  Sri Lanka is projecting to produce 360 million kg of tea by 2025, and to support the initiative, the Cabinet approved the proposal tabled by Minister of Plantations Dr. Ramesh Pathirana to increase the subsidy for new planting and replanting, from the existing amount of Rs. 400,000 to Rs. 500,000 per hectare.   In 2020, the Government allocated Rs. 300,000 per hectare for new planting, and Rs. 350,000 per hectare for replanting. This would be applicable not only for the estates coming under the Regional Plantation Companies (RPCs), but also for tea smallholders, since 73% of the tea that is produced is accounted for by the tea smallholders, and only 27% is contributed by the RPCs. Molligoda further pointed out that nursery plants are an important element for new planting or replanting, since without the nursery plants, the subsidy cannot be utilised. Last year, the Government commenced activities to boost replanting and infilling programmes, along with fertility management to improve land and cost optimisation. According to the Tea Exporters Association of Sri Lanka (TEA), tea exports for the month of February 2021 amounted to 23.16 million kg, which reflected on a decline of 0.49 million kg compared to exports amounting to 23.65 million kg in February 2020. Additionally, the cumulative exports during the period of January-February 2021 amounted to 43.99 million kg, showing a deficit of 1.76 million kg vis-à-vis 45.75 million kg of January-February 2020.  Meanwhile, revenue was Rs. 41.02 billion has been recorded, an increase of Rs. 3.36 billion vis-à-vis Rs. 37.66 billion of January-February 2020. The average FOB value Rs. 932.47 ($ 4.87) shows a gain of Rs. 109.21 per kg when compared to Rs. 823.26 ($ 4.58) of January-December 2020.


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