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COLOMBO: Sri Lanka’s tea industry could earn $1.4 billion this year despite the lowest production in decades and fertiliser shortages, officials said on Friday, as the crisis-hit country looks to attract additional foreign exchange.

The country has been gripped by a deep financial crisis this year because of record-low foreign exchange reserves, leaving the island of 22 million people struggling to pay for essential imports including fuel, food, cooking gas and medicine.

Sri Lanka’s tea industry, famous for its Ceylon Tea, which refers to the island’s colonial name, has also been hit by a chemical fertiliser ban enacted in early 2021 but later reversed.

Still, the industry has benefited from currency depreciation, partly caused by the financial crisis, and higher global prices to earn $1.4 billion in 2022, Roshan Rajadurai, spokesman for the Planters Association of Sri Lanka, said.

Earnings from tea exports is key to Sri Lanka bolstering its flagging reserves that stood at just $1.7 billion at the end of October.

Sri Lanka’s key inflation rate eases to 66% in October

“Tea production is lower by about 40 million kilos and Sri Lanka will fall short of the 300 million kilo target this year,” said Senaka Alawattegama, Chairman of the Planters Association of Sri Lanka.

Adequate amounts of agrochemicals including weed killer, fungicide and glyphosate were yet to reach plantations and production has hit the lowest point since 1996 as a result, officials said.

“However, we are confident we can meet the 300 million kilo target next year if agri-policy is maintained by the government,” Alawattegama said.

The earnings target for 2023 will remain in the $1.4 billion to $1.5 billion range, he added. The industry earned $1.3 billion last year.

Iraq, Russia and UAE are the top export markets for Ceylon Tea, the latest data from the Sri Lanka Tea Board showed. Russia has displaced Turkey as the second largest export market in 2022 compared to last year.

The country is working to access a $2.9 billion bailout from the International Monetary Fund (IMF) to put its debt repayments back on track and stabilise the economy.

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