Here are some fascinating statistics:

Immediately below are statistics and tables for the production and marketing of teas. Lower down and below these statistics are some comments and statistics about
Welfare projects for the estates and the progress in provision of new housing, water etc. 

Early Plantation history:

Originally the island was world renowned for it's spices, particularly authentic Cinnamon.

By 1824 the first coffee estates appeared by 1837 4,000 acres had been established. By 1860 40,000 acres.

By 1865 the first signs of Hemileia Vastatrix fungus. The beginning of the end of commercial coffee. The planters fortunes crashed and estates were given away.

1867 saw the first commercial field of tea (19 acres). Some estates already had played with tea in 1840.

1873 - 23 lbs of tea exported to London.

1883 - 30,000 acres of tea established. 1,665,768 lbs of tea exported

1884 - 70,000 acres established

1900 - 384,000 acres established. 1965 a peak of 590,000 acres. By 1997 worth 44 billion S.L. Rs.

Statutory Conditions for Tea Estate Employment:
(Welfare development is shown at the bottom of the statistics tables about production and Exports below).

There are a great deal of misconceptions amongst consumers about the conditions on the estates. It has become a very emotive subject with examples in one area of the world being cast on every producer country. Ceylon (Sri Lanka) has a long history of increasing regulation and provision of all aspects of employment and residency. The country is not a Western high cost of living country and therefore there is no point in justifying Western salaries and wages for these areas. However there is no doubt that every year this industry has served to better the standard of conditions for it's workers. In 1990 the estates and management companies are to be congratulated on the moves they took to ensure that they would seek to be No:1 amongst producer countries if possible in this field, some of it being economic sense. If an estate does not care for its workforce it will suffer from lack of committed families staying on the estate and providing the benefits of a resident workforce. Part of the benefit of such a workforce is that younger members register for work at 14 years of age the minimum allowed and then follow in their mother's or father's work learning as they go.

In recent years there has been much discussion about the value of various fair trade organizations to return a known amount of funds that are ring fenced as it were to the estates. The various organizations have competed for members and some estates in Ceylon (Sri Lanka) have joined in the past. However in my view these organizations like all such organizations in competing and persuading have come to use commercial advertising and in doing so statements sometimes get emphasized in an incorrect way to persuade consumers that they are the answer to a problem, this is rarely so. In backward areas with small family units without marketing expertise there can be benefits from such organizations. Where estates have a history of provision of welfare and marketing has been developed over many generations the form of help has a very limited effect indeed. Some estates have withdrawn from the schemes complaining of very limited projects that the funds can be used for and usually those projects have already been covered and that there are other more pressing matters that need funding to survive in the commercial world. I have come across more and more of these comments on my visits. At the end of the day there are perhaps four major areas concerning the estates that need resolving.

1. THE PRICES RECEIVED: Consumers and I do not count those sophisticated consumers who understand quality tea and seek it but the main body of consumers are happy to seek the lowest priced teas as so called value for money and packers follow this trend which tends to make consumers believe they can seek ever lower prices. Therefore commercial companies seek to maintain their margins and seek means of using the off grades, even Dust 2 and stalk to either add to tea bags or pelletize to cover up the quality of the product being used. In following this path the industry has been having to react to that market by criminally rotavaning high quality leaf tea so as not to produce leafy BOPF or BOP grades and then of course the scramble in some countries to follow CTC (Cut Tear and supposedly Curl) production. If we as consumers continue to accept these types of leaf we are in fact going hand in hand with the commercial companies to suppress prices even further for those Orthodox grades that have such potential for producing character in our teas and exciting consumers. Of more concern is the general disintegration of the industry under pressure to follow ever cheaper forms of production in order to compete with producer countries that have started up growing mediocre teas that are cheap because they lack character but are bought to bulk up blended teas such as ENGLISH teas. At this very moment in time I am aware that Ceylon production is wondering if it can continue with hand plucking and the production of the best teas in the world in the way that they have done in the past. Price will force mechanization of the plucking element and that will inevitably force estates into CTC production. There is a very slight glimmer of hope in that there does seem to be a growing call from consumers for better teas. Ceylon tea prices are holding at the moment rather than falling, however the problem is that prices need to rise faster than they are to keep up with higher wages & the overall investment needed.

2. YIELD: This has a big effect on profitability and there are schemes introduced by the Government and bank to help subsidize this. The yields are shown in a table headed 'Yields Made Tea' below. Our family estate was obtaining 915 lbs per acre or 915 Kilos per hectare approximately in 1953. The table shows that except for the low country there has been very little improvement until now when the these newly planted areas are beginning to swing yields upwards. However replanting is a continuing requirement as fields only planted 45 years ago are beginning to show signs of needing replanting again.

3. EXCHANGE RATES TO THE US $ and GBP £: The effect of this can be seen clearly in the section headed Auction Prices below with a table of statistics. The island has a reputation for very high quality teas and prices have been rising, particularly in the seasonal and orthodox high growns. Low country teas have held 1st position on pricing but 2002 has shown a trend for high growns to recover that position. However when prices rise and give hope to the estates their hopes are dashed by the final price received after their Rupees are converted to $ and £. Hopefully with more stable conditions in the island at present after the cessation of hostilities between the two communities this may allow some hope for the future. The picture for 2003 was one where the US $ remained reasonably steady against the SL Rupee but the £ sterling rose very strongly. 2004 should show the US $ sinking which is a reversal of the trend over the last ten years. 2006 has seen GBP sterling on the march and rising steadily against the US $ to almost 2 US$ to the GBP Sterling

4. CAPITAL INVESTMENT: Needed on a very large scale for housing schemes, clean water provision, Sewerage treatment works, maintenance of housing stocks, machinery and very importantly indeed replanting of exhausted tea fields. This last is a huge on going cost for the estates and will need to be undertaken on each hectare or acre of land every 35 to 60 years depending on the growing elevation. This replanting has a huge effect upon the profitability of an estate by raising yields. We may unfortunately see a worst scenario than this as there is some evidence creeping in that the clones may not even last that long.

5. METHOD OF HARVESTING: The endless decline in quality presented to consumers, particularly in blended teas, is suggesting that anything goes and we are seeing the the cheaper forms of processing being forced to the fore. The two major bodies in the island that monitor trends and drive the future of the industry are beginning to accept the possibility of some form of mechanical plucking and ever cheaper forms of presentation. Only recently the Indian Research Institute at Tocklai has been involved in developing a tea pill. That really would be the end of any romantic image of tea and in my mind would result in declining sales of tea.
Mechanical plucking would mean the end of any serious residential labour and the throwing of many families onto the labour market. It would also mean the end of really top quality teas.

COLLECTIVE AGREEMENT RATES of PAY:
Part of the misconception that is perpetuated amongst some sectors in the West and I have come across quite a number of uninformed comments recently, is the way the estates care for and pay their workers. There are misconceptions about slave labour, employment of young children in tea etc. I have therefore taken the opportunity to include the statutory collective agreements between the estates and Unions which are then made law and issued as a government statute. The table shows the 2002 agreement and further negotiated agreements will occur every 2 years.

Basic Rate:

The 2006 Basic wage settlement is a rise of 44 % on the 2004 settlement. This shows the huge strides that are being made to retain labour on the estates but makes me wonder at what cost to the future viability of these estates. Hopefully prices will rise to offset these big jumps in these settlements but it is only a hope.

The Price share supplement is computed from the level of price received in the previous year and if it has risen the workers get a share'
The Attendance Incentive is an extra bonus to make it attractive to turnout.
The Exchange rate in 2002 was Rs.150/= to the GBP £ Therefore the basic wage equates to £1 sterling near enough.
The Exchanr rate in late 2006 is Rs.200 to the GBP £. therefore the basic wage equates to £1.30

Supplementary Bonuses and Pension Details: ------The 2006 settlement remains as for 2004

Other Benefits:

Free Medical facilities
Free Milk to infants below 1 year
Free feeding flour to children between 1 & 10 years old
Sick leave payment at half rate for a period of 14 days per annum
Workmen's Compensation
2002 Funeral assistance Rs.600/= .......2004 = Rs.12,000/= plus 4 names as we call it = 4 workers for family.
Free transport to hospital
Free Housing and Supply of clean water. This becomes the workers house for as long as his family are on the estate and can be passed down
Creche facilities with paid attendants usually in every division of an estate. Some estates have 6 divisions.

VOLUNTARY Benefits Instituted by an Estate:

Each estate has negotiated certain needs of it's workers and when visiting the estates I have found some very innovative programmes that have been funded by the estates. The Robert Wilson tour group in January 2003 visited a number of estates in different areas and all compete to be the best which shows the passion that the estates have to succeed in spite of the huge difficulties they face.

One estate that we work closely with provides the following:
Free health camps
Annual dental camp for children
Creche children's work exhibition, drama competition and annual trip
Sports meet and volley ball tournaments
Cyber cafe and E learning center with free Internet access
Setting up of a Pluckers / Children's saving scheme. Should the husband leave the family a fund is place for the family
TQP Management programmes (Total Quality People)
Facilitating loans for gas cookers and electricity
Tree planting programme - Estates have always had these from early times. Usually rocky areas on the hills planted with a range of species but gum is a good firewood generator which regenerates itself after cutting.
Providing jerkins for pluckers
Providing factory worker uniforms. This estate also has an excellent dormitory for night workers with television, plus washing facilities and lockers for each workers belongings and clothes.
Providing midday meals for creche children
Sports meet at estate schools
Implementation of Quality circles
Introduction of 5S' for school and homes
Practicing of safe work place concept

This estate was awarded ISO 9002 status in 1994 - Quality Systems

Hopefully any consumers reading right to the end of this comprehensive record will feel satisfied that within the context of this islands culture and cost of living structure the Ceylon Tea Industry is right at the front of caring for their workers and we hope that you will support their efforts. If you pay pence for your cheap low quality teas then the estates will receive very little. If you resolve to seek really high quality teas with all the effort and skill that has been put into them and the higher price structure that they command then this will reward the estates and let them feel valued instead of frustrated as they are now at Western criticisms that have been leveled over many years. They can only achieve what you as consumers allow them to. The cost of your healthy and comforting cup of tea is only just above the cost of water at present. That is in my opinion is unacceptable for such a fantastic product.

TEA INDUSTRY PRODUCTION & EXPORT STATISTICS:

History of Production by elevation:

Yield: Million Kg

* 1984 was the year that low elevation overtook the traditional highest yielding area of High elevation tea.

In 1995 Low elevation increased it's planted area by 10,000 hectares and achieved this again in 1997.

Acreage: (Thousand Hectares in cultivation)

Overall the planted area has reduced, yet yield (mainly from new planting with VP) has increased.
With the present prices being received it is vital that yield increases for the estates to survive.
The elevation emphasis has changed dramatically (The low elevation increase has been with new VP planting). In 2002 we have seen growth from the high grown area with a 11.8 % year on year increase. The high grown area in 2002 reached its highest volume at 87 million Kgs since 1966 before Nationalization of the estates. Denationalization has allowed the skill and passion of the planters to deliver once more. 2003 saw a reduced production at the end of the 1st quarter with the start of the Iraq war and then the unusual heavy flooding that hit the low country area hit the production total again. However the end of year total only showed a 7 million Kilos drop overall. Ceylon tea exports still managed to remain 10 million kilos ahead of Kenya on production and retain its position as the No.1 tea exporting country 23 million kilos ahead of Kenya.

In 1965 the high grown teas were the highest priced. Today the low growns are the highest priced, year around. In 2002 we have seen some swing back to high growns recovering because of a shortage of Orthodox high growns. India in particular has been converting to CTC production. In 2005 we are already seeing the trend for the year with Traditional (Orthodox) production increasing in % terms over 2004 and CTC again declining in % terms.

Old planting to new:

The first planting was in 1867 (133 years ago). In 1997 it was estimated that 45 % of the planted area consisted of bushes planted between 1867 and the 1950's. Whereas 55 % of the area was in new VP planting. As the estates struggle to fund replanting this balance will change.

Yields Made Tea:    Kilos / Hectare (Lbs / Acre)

Both high and medium elevation need extensive replanting, a very costly exercise The island is committed to achieving this as and when funds allow it. The cost can be £5,500/Hectare and a subsidy of some £850 has been available in the past and this may be about £1,000 to-day.
Ideally Low tea should be replaced every 35 years. High grown tea every 50-60 years.
The advantages of new planting are reflected in the table below. The Low elevation area has been extensively replanted and more particularly enlarged on new ground with new tea. The medium region is largely the area planted with coffee originally and the first tea bushes. Some areas of soil in the mid country are exhausted and have been taken out of tea.
I have entered in the table below the annual yield figures for our family estate. It can be seen that the national average did not advance above this for all areas until 1988 when replanting was increasing. The Medium elevation area only superseded this yield in 2000.

The Importance of Tea in the Economy:

The Tea Board cess raised from tea is at Rs.2/50 per Kg (2.2 lbs). This cess is reinvested in marketing & help with the estate trust fund.
Keels have quoted figures recently showing the Industrial contribution to exports as 78.2 %, Textiles as 48.8 %, Agriculture 18.4 %, Tea 12.8 %.
However as Textiles or garments require a high import element tea tops Textiles in exports. Furthermore my own comment is that Textiles & Industrial could well be under huge pressure over the next 4-5 years from the Chinese aggressive economy and recent gains in wage levels will prove to be too high for the island to compete. Wage levels in the tea industry are already forcing the industry to look at mechanical plucking, this would be disastrous for the world's finest quality teas.

Auction prices:

2004 saw good Uvas rising to Rs.700/= at auction level whereas plain Uvas were at Rs.160/= to Rs.180/=. Other sales of Uvas rose to Rs.1,300/= for BOPs. This does not include FPs.

Stalky teas down to Rs. 90/=. which shows how low pricing can drop to for blenders and tea bag teas.

It is interesting that Private & direct sales increased from 217 million kilos in 2000 to 415 Million kgs in 2004.

Imported teas which are then exported increased from 4 Million Kgs in 2000 to 7.5 million Kgs in 2004.

Total world sales increased from 1.38 Billion Kgs in 2003 to 1.49 Billion Kgs in 2004.

In 2004 Colombo lost its No.1 position as the largest auction centre in the world to Mombasa Kenyan production managed to overtake Ceylon teas as the No.1 exporting country in the world.

However Colombo retained No.1 position in the world for the highest auction prices through the year. These prices confirm that Ceylon teas are still holding their popularity because of their extremely high quality, character and their reported position as the cleanest teas in the world as far as pesticide testing is concerned for nearly ten years now.

World Auction Annual Averages:

From 1994 to 1998 the average rise was 6.6 % per annum after the disastrous returns in the early 1990's.

Leaving out 1994 the rise is even greater at 12.75 %. Only when the market is buoyant, can sensible reinvestment be expected. Recently the unions have negotiated an increased package for the plantation works from this trend. Estates management's are as aware as anyone that unhappy workforces = unhappy and declining estates.

The island has invested in Bio control and reduced spraying to an absolute minimum, invested in replanting and new planting, many estates have invested into certification programmes to make them comply with Western standards of hygienic handling and packing. Huge strides have been made in worker welfare projects, renewing housing, safe water, sewerage systems,  expanding hospitals and schools on estates. Unfortunately the new higher return per kilo for tea are not translating into sensible profits. The Rupee has been losing ground to Sterling and the US $ over the years. Until the 1970's it held steady at Rs.13/= per £1, since then it has soared to Rs.120/= to the £. recently it has been floated on the currency market and it continues to go down against the £ & $ although 2004 has seen the rupee rising due to a declining dollar strength & also peculiarly funds arriving during the Tsunami in 2005. Therefore the higher prices received in at present must be seen in the light of the world currency markets. The second downside to this is the Unions demands for higher wages with higher prices that after currency compassion become stable or reduced prices. Their financial situation is undoubtedly largely driven by the continuing conflict between Singhalese and Tamils and this is undoubtedly causing inflation to grow faster and faster to the discomfort of the population as a whole. In 2004/05 the peace talks benefit has stabilized this discomfort. The table below hopefully illustrates this problem.

FOB prices as against Auction prices reflects the added value to the island, from a significant packing industry that has grown over the years. Some more detailed information is given in a table below headed - Exports by type to FOB value.    It is sufficient to comment here that the FOB value of tea exports rose in year 2000 to Rs:184.17 from year 1999 at Rs:163.83. This rise will again be depleted by the $ exchange syndrome that bedevils the industry. It is also important to realize that these Auction and FOB prices relate to an average across the industry. That average is held down by A) the largest % of exports being in Bulk which is lower in value and B) covers all levels of quality. Our own teas which are negotiated direct are very significantly higher in price.
In 2004 it is likely that the figures will show the rupee holding its own against the $ but losing against the £ sterling on this occasion.

 Exports by Type of Packing as % of Total and FOB SL Rs:/= Value per Kilo: 

The above table demonstrates the advantages to the economy of this island if the design and packaging facilities based there can convert a greater % of bulk tea to packeting. It also unfortunately demonstrates how due to the marketing of convenience that the traditionally lower quality teas for tea bags and instant tea are attracting high prices compared to the better grades of tea on average. High quality seasonal teas still retain very high prices but a minute share of the overall market.

Tea Exports by Earnings and type:                              (The values are Million Kg and Thousand Million S.L. Rs.)

N.B.    To interpret the above reasonably satisfactory yield and revue increases, the relation between the Rs: and the U.S. $ shown at the Auction Prices, table above has to be taken into account. 

Indian production and exports: (Million Kgs)

* = Unrecorded 2003
** = Includes imported & re-exported teas.

India consumes a large proportion of production internally and therefore exports do not quite reach Sri Lanka levels.
It is of interest here to note the minute amount of Darjeeling production compared to the fact that it is apparently served everywhere in shops and Tea shops. This clearly suggests that other teas or blends of teas are being served as Darjeeling.

EXPORT EARNINGS: (Production and exports in Millions of Kilos - Values in Millions S.L. Rupees)

* = 14 % increase in value of exports over the previous year for 1.5 million Kgs less

C.T.C. compared to Traditional (Orthodox) Production: (Million Kilos)

Kenya is now said to be almost 100 % C.T.C. production - India is reaching into 60 %, particularly in Assam. Ceylon have steadfastly backed  Traditional roll quality teas in spite of huge commercial pressure to abandon it. They have been rewarded by being accepted internationally as the producer of the highest quality teas in the world and also the largest exporting country in the world. This must say something about Traditional production. The demand for traditional leaf has pegged CTC to a small static %.  I constantly question the Curl in CTC because there is a slight bend in the leaf but certainly not curl.

Green Tea as Total of Exports: (Million Kilos)

% Share of World Market:

Exports from Sri Lanka by Country: (Million Kilos)

These are the major importers out of about 116.

Libya is the most significant player to increase imports. CIS remains at No.1 position. U.K. continues to decline going for cheaper teas elsewhere to blend.

It is significant to note that in the late 1800's Ceylon exported largely to the United Kingdom.
In 1919 Ceylon exported 208 million lbs of tea (94.35 million Kilos) and 140 million lbs  (63.50 million Kilos) to the U.K. 

Sources for these figures: Customs 1965 - 1994 - 97 and 1998 & 2000 Forbes and Walker review, also John Keels and Asia Siyaka reviews - S.L. Tea Board.

WELFARE  PROVISION:

Up to Nationalization all welfare provision was the responsibility of the estate and the owners whether private family estates, rupee company or sterling company estates. Such provision came out of the profits of the estates and provision had run from the original mud and stick lines with mana grass thatched roofs to the 1920's style stone and mortar lines with corrugated tin roofs and finally to the 1950's style of individual cottages. A Line is a long building split into a number of rooms with a kitchen verandah front room, basic but adequate and in line with what was the norm. Estates usually had a number of springs in the upper reaches of the estate close to the tops of the hills. These were tanked with concrete and piped to the lines and bungalows. For the lines there was usually a number of stand pipes in front of the line perhaps 3 or 4 for a 12 room line.

During the 1950's twin toilet blocks were built at the rear of the lines with one toilet per room and properly designed septic tank systems. Again during this period the individual cottages were designed and built to slowly replace the line system. This was an expensive provision and progress was slow but each year the estimates carried provision for maintenance of the old housing stock and capital expenditure provision for new cottages. These cottages now provided a single room unit or double room unit. Both with a kitchen, front verandah and rear verandah. 

Activity:                                        Units:                    Cost in Million Rs:
 New Housing                                12,115                        170.09
Upgrading existing housing              3,533                          80.49
Re-roofing                                     47,123                        414.19
Water Supplies                               1,937                        279.33
Latrines (Toilets)                         68,806                        253.66
Hospitals & Maternity units               218                           40.57
Creches                                            727                          100.43
Staff Quarters-Welfare                   1,130                          111.52
Staff Quarters-Other                         623                            28.35
Farm Roads                                   1,474                           61.56
Community centres                             39                            13.89 
TOTAL                                                                      1,525.73

Privatisation:    Started in 1992 with an unfortunate plan to distribute the estates to tender for a 5 year period which proved totally unworkable as it discouraged investment. In 1995 a positive basis was introduced . Under this the private companies have a 51 % stake, employees 10 %, Public 20 % and the Government 19 % plus golden share security.
The companies have some 318 estates with 79,723 hectares = 41 % of total Hectares and 49 % of the total national production. The total national production produces some 6 % of GDP but some 20 % of Foreign currency earnings. Employment is 20 % of total employment. 

Tea Yields:    To 1999 = 1,425 Kg Av per hectare = approx 1,250 lbs per acre. This should and can be very much higher which would increase the profitability. The problem is likely to be that the old bushes are straining to produce and the replanting costs are very high. Our own estate rose from 500lbs / acre in 1900 to 915 lbs per acre in 1953 and estates in 1964 were achieving 1,200 to 1,500 lbs per acre fairly regularly. 1,200 lbs would have been a reasonable average figure for company estates. Kelani valley and Maskeliya have shown the greatest leap in yields since privatization.
Capital investment on all areas since privatization has been some Rs. 11 billion or Rs.550 million per company.
Of the Rs.10.9 billion approx 62 % to fieldworks, 19 % to factory and 10 % to Social, however this 10 % does not include the estates own investments in social development.  80 % of the fieldwork investment has gone into replanting and this is vital to raise profits as is factory machinery efficiency.

Labour Cost:   For many years prior to and including the 1960's the estates worked to a formula of trying to maintain a worker to acreage ratio of some 1.25 workers per acre. The recent PHSWT report from which a considerable amount of this information has been extracted, shows that the present ratios is from 1.5 to 3.5 workers per hectare. This = a max of 1.4 workers per acre  2.76 per hectare is given as the average which is 1.1 workers per acre. The industry is trying to lower this to increase profits by mechanization, changing production to the cheaper CTC etc. This is where I personally feel you can take economics too far and the reputation of this amazing tea area for extreme quality could be jeopardized for ever. It has been important to discipline the industry and to drive it to higher standards and investment but it will not pay to kill the goose that lays the golden egg. To join the world CTC market at a time when there is a surplus in the world is madness in my view especially as this island has not only taken over as the largest exporting country in the world but now heads the world for quality with the problems that the Indian tea industry is experiencing. 

Labour availability:    This has been declining as workers and families have moved to Colombo or other towns. There have been four revisions of labour since 1992 with the unions and without the need for government interference. Up to year 2000 wages rose by some 48 % and as high as 67 % for workers with over 90 % turnout. Unfortunately the cost of living rises have eroded these increases. The escalation in the cost of living has been badly affected by the civil war and that effect should now disappear and hopes for the future economy are very positive.

Welfare:    Of the 200,000 housing units existing on the company estates it is estimated that some 70 % of them need upgrading or replacing. The cost of this is estimated at some Rs:9 billion which is far beyond the capability of the stakeholders e.g. estates, employees, public and Government.
Each estate employs approximately 110 health workers. Approx 56 % are creche attendants, 15 % health supervisors, 12 % midwives, 9 % medical staff and 4 % pharmacists.
Out of an annual expenditure of Rs:800,000 per estate, which the estates are obliged to expend on health / welfare / drugs / Health clinics / Social infrastructure and a PHSWT levy of 11 %. The breakdown of these areas is approximately 46 % on staff, 43 % on supplies and transport and 11 % on the levy.
This may not seem a huge amount per estate but it is a considerable burden on their cost structure.