Annual Report 2008 - Ministry of Finance and Planning

6. A Sectoral Perspective
245
Plantation
Sri Lanka’s plantation sector contributes 23 percent to
agricultural production. The plantation sector provided
employment for about 1.5 million persons in 2008. About
750,000 ha. of land has been occupied. The plantation
agriculture recorded an average growth of 5.2 percent in
the year 2008 compared to the 2 percent witnessed in 2007.
The developments were attributed to the 4.3 percent growth
in tea, 10.3 percent growth in rubber and 5.2 percent growth
in the coconut sector. The overall growth in supplementary
plantations such as sugar, cashew and palmyrah decelerated
to 3.5 percent in 2008 compared to 5.8 percent growth
recorded in 2007.
The Highest ever Tea Production
The tea industry for the first time in the history recorded a
highest production amounting to 318 million Kg. in 2008, a 4
percent increase over 2007.
With the continuous efforts to enhance the quality of Sri
Lankan tea, higher global demand in the first half of 2008
and increased value addition led the tea exports to rise to
Rs. 137.6 billion and constitutes about 20 percent of the total
export earnings.
The price of tea was conducive for growers throughout
the year except the last few months in 2008. The average
FOB price of made tea was US $ 3.89 per kilogram in 2008,
surpassing the price of US $ 3.13 per kilogram recorded in
2007. The average unit price of all elevational categories was
well above the previous year and averaged at around Rs 310
per kilogram in 2008. The price of low grown tea averaged at
around Rs. 337 per kilogram.
Chart 6.9
The tea production increased by 19 percent in the first
half of 2008 recording buoyant performance in the sector.
This impressive achievement is mainly caused by several
factors such as attractive price regime prevailed over the
first three quarters in the year, favorable climatic factors
and incentives provided by the government. However, this
growth was crippled by the lower external demand making
the annual growth stationed at 4 percent.
Ministry of Finance and Planning Sri Lanka
Annual Report 2008