Identifying the influencing factors in sustainable tea supply in the Sri Lankan tea industry

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Jayaratne, Mahawattage Dona Ranmali Pradeepa
Sydney Business School
agri-supply chain; supply chain management; sustainable supply chain management; supply chain mapping; supply chain structure; tea supply chain
thesis / dissertation description
In monetary terms, the Sri Lankan tea industry was until 1995 consistently the country’s largest exporting element. The tea industry has always played an important role in the Sri Lankan economy, because it uses mainly local resources and over 20% of the population directly depends on it.The Sri Lankan tea industry also plays a significant role in the global tea industry. For over three decades it was the largest tea exporter into the global supply chain (in both value and volume). However, Sri Lanka is currently ranked as the fourth-largest tea exporter in the world. Tea-production volume has stagnated at around 300,000 metric tonnes in Sri Lanka, while at the same time global production volumes have increased considerably in other tea-producing countries. Production costs have increased in real terms globally. Importantly, Sri Lanka has the highest production cost among all producers. Thus the sustainability of the tea industry in Sri Lanka is at risk.Previous research has indicated that the characteristics in the agricultural sector, including tea production, are now similar to many characteristics of the manufacturing sector. However, this has not yet been fully investigated in the Sri Lankan tea sector. Even though some research has explored supply chain management aspects of agricultural products such as coffee, potatoes and cocoa, little attention has been paid to the tea industry.The main objective of this research was to explore the tea supply chain, specifically focusing on the Sri Lankan tea industry. This research identified the influencing factors on a sustainable tea supply chain by mapping the supply chain for both smallholders and large-scale producers.