The recent 15% increase in electricity tariffs has posed a serious threat to Sri Lanka’s tea export sector, raising concerns over its global competitiveness, according to Dhanesh Devanayagam, former president of the Tea Exporters Association (TEA).
Devanayagam said the added energy costs are pushing production expenses upward, placing Sri Lankan exporters at a disadvantage against key global competitors such as India and Kenya.
“The appreciation of the rupee has already brought down the cost of importing fuel and coal for power generation. In addition, current weather conditions mean hydropower is being generated at a lower cost. In light of these factors, the decision to raise electricity tariffs at this time is difficult to justify,” he said.
He warned that if production costs continue to climb, Sri Lanka’s tea exports could face severe setbacks, directly impacting the livelihoods of nearly two million people who depend on the tea industry.
Devanayagam urged policymakers to take a careful and informed approach when making decisions that could disrupt a vital sector of the economy, particularly one that is so closely tied to rural livelihoods and export earnings.
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