By Steve A. Morrell-July 17, 2015
Chairman Planters’ Association of Ceylon ( PA) Roshan Rajadurai informed The Island Financial Review yesterday that although there was no agreement or conclusion to a protracted dispute between tea trade unions and Regional Plantation Company managements on tea worker wages, routine work was restored in the plantations.
There were some pockets of resistance to a resumption of work on the part of some workers who were unsure of their unions' stance, but, generally, trade union action was suspended, it is learnt.
CEO John Keels PLC, Sudath Moonasinghe’s response was that tea estates were functioning and trade union action was on hold pending further discussions between the disputing sides after the upcoming general election. He said restoration of industrial normalcy was welcomed by the tea trade, particularly because prices dipped to low net sales averages (NSA), and sustenance of the industry at such low prices would have been difficult.
Lifting of economic sanctions on Iran was an additional plus to the local tea market.
Iran was the third largest importer of Ceylon Tea. In 2014 they absorbed 30 million kilos. 2012, 41 million kilos and in 2013 the imported quantum to Iran was 39.65 million kilos.
Lifting of sanctions also meant that Iran had access to regular banking benefits with dollar accounts and allied transactions.
Would tea prices see improvement? "Don’t expect miracles in the short run, but the Western sanctions being lifted on Iran will undoubtedly have its salutary repercussions. When and how, is currently too early to conclude, Moonasinghe said.
Oil prices too will continue to influence market conditions in Colombo, but the general consensus among the tea trade was that Iran's improving economic situation would have a positive impact on Sri Lankan tea.
Particularly low growns will be in a better position. Iran does not buy filler grade teas but good garden marks. However, Westerns and Nuwara Eliya's will not benefit. Iran's buying is usually restricted to low growns.
Roshan Rajadurai agreed that restoration of normalcy in tea plantations was crucial to the industry. He also said although workers did not report to work, the compromise was that days not worked would be add ons for holiday wages.
Reverting to worker demands, Rajadurai said the flat rate of Rs. 1000 per day is unrealistic, particularly, because market conditions were bad and not because of any fault on the part of producers. But Ceylon Tea is constantly dependent on market conditions. The tea market is depressed, and would remain so for an undetermined period.
The granting of the Rs 1000 demand would have meant that the increase would be about 45 percent above current wage structures. The cost of production was Rs. 200 above the net sales average, which Rajadurai said was an untenable position.
