Sri Lanka's tea industry faces pressure due to Middle East conflicts.

Sri Lanka is the world's third-largest tea exporter. Its vast, lush green tea plantations are a source of pride and the lifeblood of the country's $1.5 billion economy . However, the conflict in the Middle East is putting pressure on this iconic industry, which provides livelihoods for over 2 million Sri Lankans. The Sri Lankan tea industry is struggling to find new ways to overcome its current predicament.

The town of Hatton in Sri Lanka is in the midst of harvesting its highest-quality tea leaves. However, the country's tea industry is facing concerns about product sales. The conflict in the Middle East has severely impacted this key export market, causing export revenue in March alone to fall by more than 17% compared to the same period last year.

Lushantha De Silva, President of the Ceylon Tea Trade Association, said: "After the conflict broke out, tea prices immediately dropped by 20%, and about 20% of the tea supply became unsaleable. Demand from Iran has now completely frozen. However, some other markets have started buying our tea, and demand is showing signs of improvement week by week."

However, improvements in new markets have not yet offset the severe decline in traditional markets in the Middle East – which account for half of Sri Lanka's total tea exports. Figures from the Export Development Bureau show that tea exports to Iraq have fallen by 38%, while the figure for the United Arab Emirates (UAE) has reached 93%. Dilmah, a renowned tea brand present in over 100 countries and holding a 30% market share in the Middle East, is scrambling to find temporary alternatives to adapt to what they call a "volatile new normal."

Dilhan Fernando, Chairman and CEO of Dilmah Tea Company, shared: "We are exploring regional sourcing or establishing decentralized distribution centers to protect ourselves against geopolitical fluctuations. Today it might be the Gulf, tomorrow it could be somewhere else. We need to adapt without compromising our commitment to the quality of our original, fresh tea."

With the crisis showing no signs of abating, pressure is mounting on Sri Lanka's export ports and tea plantations. The Sri Lankan tea industry is being forced to transform itself, abandoning the export of low-value raw tea in favor of more specialized, refined products to adapt to the current situation.

Source: https://vtv.vn/nganh-tra-sri-lanka-doi-mat-ap-luc-do-xung-dot-trung-dong-100260523100921185.htm