📉 Ceylon Tea Sector: Structural Collapse Masked by Smallholders' Output

• The RPC-managed plantation tea sector has structurally collapsed, with output falling drastically from approximately 160,000 MT in the early 1990s to only ~66,000 MT last year—a loss of over 50%. • This decline was masked by the rise of tea smallholders, which kept the national total production stable around the 250,000 MT mark (246,000 MT in 1995). • RPCs recorded large profits and dividends by extracting value from a dying asset (long-term decapitalisation), not by strengthening the estates. • Asset stripping includes: reducing workforce (average age now >45), cutting reinvestment, outsourcing plucking (lowered quality), neglect of fields/fertiliser, factory closures, and significant bush loss. • A genuine revival is considered impossible due to the absence of the required preconditions: massive capital investment, a willing and trained labor force, and necessary expertise. • Strategic Pivot: Future focus must shift from commodity revival to value-driven, specialty tea (smallholders/artisanal) and diversification into new sectors like technology, services, tourism, and potentially coffee.