Tea industry growth mirrors SL’s economic revival but reforms key: IMF

Sri Lanka’s tea industry, which has weathered repeated crises, stands as a symbol of the country’s economic resilience, the International Monetary Fund (IMF) said, although it went on to caution that reforms must be sustained to secure recovery.

IMF Resident Representative Dr. Martha Tesfaye Woldemichael said over 90 percent of tea production is exported, supporting two million livelihoods and underscoring the sector’s role in the economy.

She shared her views while speaking at the 26th Annual General Meeting (AGM) of the Tea Exporters Association (TEA) recently.

“This AGM is not just a business gathering—it is a celebration of resilience. Like Sri Lanka itself, the tea industry has weathered crisis and is now on a path to revitalisation,” she said, adding that embracing sustainability, competitiveness and innovation would keep the sector a cornerstone of economic renewal.

Dr. Woldemichael noted that revenue mobilisation has improved, international reserves are building and debt restructuring is well advanced, restoring investor confidence. 

“This remarkable turnaround did not happen by chance. It is the result of decisive actions by the authorities and the extraordinary resilience of the Sri Lankan people,” she said.

Still, she cautioned that Sri Lanka’s recovery is fragile, with global trade tensions and geopolitical conflicts posing risks. She stressed the importance of reforms to create a predictable policy environment, strengthen governance and open space for private sector investment and job creation.

Reinforcing the narrative, TEA Chairman Huzefa Akbarally said the industry projects tea exports of 270 million kilogrammes in 2025, with revenues exceeding US $ 1.5 billion, nearly 10 percent higher than last year. 

“This growth is a testament to the resilience of our smallholder farmers, who produce 70 percent of Sri Lanka’s tea,” he said.

However, Akbarally warned that declining yields among the smallholders demand urgent investment in replantation and block-in-filling. With the right support, he said, Ceylon Tea could achieve the government’s 2030 target of 400 million kilogrammes and US $ 2.5 billion in export revenue.