Sri Lanka Tea Export Earnings Fall 17.3% to $114.75 Million as Middle East Conflict Disrupts Trade
Updated
Updated · Reuters · May 21
Sri Lanka Tea Export Earnings Fall 17.3% to $114.75 Million as Middle East Conflict Disrupts Trade
5 articles · Updated · Reuters · May 21
$114.75 million in March tea export earnings marked a 17.3% year-on-year drop for Sri Lanka, with shipments hit by the Middle East conflict.
Export Development Board data showed Iraq—Sri Lanka's biggest tea buyer—cut purchases 38%, while exports to the UAE plunged 93%; nearly half of Ceylon tea exports, worth about $680 million a year, go to the region.
Higher fuel costs and shipping disruptions are squeezing producers including Dilmah, which gets about 30% of its business from the Middle East and is accelerating expansion into Canada, South America and the U.S.
The shock is rippling through a $1.5 billion industry that supports about 2.4 million people, where plantation workers earn 1,350-1,750 rupees a day and many are already cutting meals and missing school.
The export hit adds to wider economic strain in Sri Lanka, where the government has raised fuel prices 40%, rationed supplies and made Wednesdays a public holiday to conserve energy.
With its main market collapsing, can Sri Lanka’s famed Ceylon Tea reinvent itself for the Western world?
As tea workers flee to cities, is Sri Lanka trading a rural crisis for an even larger urban one?
Is the Mideast crisis a final wake-up call for Sri Lanka to break its cycle of economic dependency?
Sri Lanka’s Tea Industry Faces $1.5 Billion Crisis as Middle East Conflict Halts Nearly Half of Exports
Overview
Sri Lanka's tea industry, valued at US$1.5 billion, is a cornerstone of the nation's economy and provides livelihoods for about 2.4 million people. Despite its importance, most tea plantation workers earn low daily wages, with more than half living below the international poverty line, making them extremely vulnerable. In May 2026, tea export earnings plummeted, directly threatening the livelihoods of millions. This crisis highlights how deeply the industry's stability is tied to both the country's economic health and the well-being of its large, at-risk workforce.