A two-year no-strike pact expired in December and bargaining on 23 January failed to yield results. Sri Lanka has again became world’s largest tea exporter mainly due to shortage in supplies from Kenya, Bangla Desh and Indonesia and demand from former Soviet Union nations. Tea exports rose by 8% in 1997 and revenue by 22%. The companies argue reserves must be built against possible decline in tea prices. The Tea Research Institute warns of the El-Nino effect predicting a drought in 1998.
Unions accepted Rs 83 in April 1996 on assurance that wages will rise with profits. Their demand, they say, takes into account the rise in cost-of-living since 1996 and point out that the government has taken from companies responsibility for part of welfare such as housing.
Plantation workers continue to suffer the effects of denial of citizenship and franchise rights in the early years of independence. Unions say after 50 years of independence, effective measures are essential for real change in their living and working conditions.