Cabinet approves proposal to allocate Rs. 1 bn to purchase auction tea

6 November 2015 06:30 pm

By Lahiru Pothmulla
 The Cabinet of Ministers yesterday approved a proposal made by Plantation Industries Minister Naveen Dissanayake to allocate Rs. 1 billion to purchase 1kg of quality tea for Rs. 430, from the Tea Board auction, in order to stabalise tea prices. Cabinet Spokesman Minister Rajitha Senaratne said, since the beginning of this year, price of a kilo of tea at the auction had come down due the turmoil in countries to which Ceylon Tea is being exported.
 “Although the production cost of a kilogram of tea is Rs. 450, the auction recorded a price of Rs. 385.51.

Therefore, Minister Dissanayake proposed to allocate required funds to purchase 1kg of quality tea for Rs. 430. However, the government will suspend purchasing once the price reaches the limit of Rs. 450,” he noted.

 He said in 2008 too, the government had controlled the tea price by purchasing from the auction, and the latest proposal had been made by Minister Dissanayake based on that experience.

Meanwhile, Minister Senaratne said the government had already allocated Rs. 6,000 million to provide a certified price for tea, as well as to provide subsidies to industry stakeholders, especially in the small category.