As climate extremes ravage Sri Lanka’s iconic tea estates, the legendary “two leaves and a bud” standard for premium Ceylon Tea risks becoming a distant memory, warns Dilmah’s chief.
At the Sri Lanka Climate Summit 2026, Dilhan Fernando, Chairman and CEO of Dilmah Tea, delivered a stark message to the industry and nation: the hallmark of quality plucking – “two leaves and a bud” – is rapidly turning into fiction amid escalating climate disruptions.
On Thursday, Fernando cautioned that declining leaf quality, driven by erratic weather, could soon trigger a broader collapse in quantity and output. Sri Lanka aims for around 400 million kilograms of tea production this year, but sustained climate volatility makes that target increasingly unrealistic. “The way we are heading, with the climate extremes, the extremes of rain and the extremes of drought, that too is a fiction,” he stated.
Terroir Under Siege
Ceylon Tea’s global reputation rests on its unique terroir – the delicate interplay of climate, soil, elevation, and rainfall that imparts its distinctive flavour, aroma, and premium positioning. Fernando emphasised that tea and similar products like cinnamon derive their value from this environmental specificity. “Ceylon Tea is connected with premium, it is connected with luxury, it is connected with terroir. Terroir is a function of climate,” he explained.
Prolonged droughts followed by intense rainfall are disrupting the precise conditions tea bushes need. Research shows tea is highly sensitive to changes in temperature, precipitation patterns, and humidity. A hotter and wetter climate is projected to have detrimental effects on yields across elevation zones. Under high emissions scenarios, annual production could decline by around 12 per cent by mid-century.
Broader Impacts on the Industry
Sri Lanka’s tea sector, a cornerstone of the economy and a major export earner, employs hundreds of thousands and contributes significantly to foreign exchange. Climate change compounds existing pressures: rising labour costs, an aging workforce, stagnant productivity, and global competition.
Erratic weather already affects harvests. Studies highlight how reduced monthly rainfall by as little as 100 mm can slash productivity dramatically in certain regions. Pests and diseases also proliferate under changing conditions, further threatening quality and output.
Smallholder farmers, who form a large part of the industry, are particularly vulnerable. Many rely on tea for livelihoods while facing food security risks from the same climate shifts. Women, who dominate plucking work, bear much of the brunt through physical labour under harsher conditions.
Regulatory and Market Pressures
Beyond field-level challenges, Fernando highlighted incoming international regulations that will demand greater accountability. The EU Deforestation Regulation, packaging waste rules, and Green Claims Directive will penalise producers unable to verify sustainable sourcing and operations. Exporters risk exclusion from key markets if supply chains fall short.
This regulatory tightening reflects growing global consumer and policy focus on sustainability, turning climate adaptation from an environmental ideal into a commercial necessity.
Dilmah’s Response and Call to Action
Dilmah has long positioned itself as a leader in sustainability, said Fernando. Through Dilmah Conservation, the company established Sri Lanka’s first Climate Change Research Station and pursues initiatives like agroforestry, reforestation, biodiversity corridors, and carbon neutrality goals. The firm achieved carbon neutral status for its operations and products years ago and aims for carbon negative outcomes.
Fernando described adaptation as “another word for survival” and urged accelerated investment in nature-based solutions, climate-resilient practices, and finance mechanisms. Sri Lanka, he noted, is “paying for sins we did not commit” yet has opportunities for reimbursement through climate finance that the country must seize.
Collaborations, such as with the Global Green Growth Institute (GGGI) on agroforestry, aim to model sustainable coexistence of tea production, biodiversity, and communities. Dilmah calls for industry-wide efforts, including stronger ties with researchers and universities, to build resilience, said Fernando.
A Global and Local Crisis
Tea production worldwide faces similar threats. Regions like Darjeeling in India report declining quality and yields due to warming and erratic rains. Globally, climate change shrinks suitable growing areas, spreads pests, and disrupts the delicate balance tea requires.
In Sri Lanka, historical data shows temperatures have risen about 1°C over the past century, amplifying risks. The National Adaptation Plan and private initiatives underscore the need for urgent, coordinated response.
The Path Forward
Experts and industry voices stress that while challenges are severe, opportunities exist in innovation: precision agriculture, improved irrigation, shade trees for microclimate regulation, soil conservation, and diversified income for farmers. Research into climate-smart varieties and practices is critical.
Fernando’s warning serves as a wake-up call. Preserving Ceylon Tea’s legacy requires not only mitigating emissions but adapting plantations, modernising practices, supporting workers, and aligning with global sustainability standards. Failure to act could erode one of Sri Lanka’s most cherished economic and cultural assets.
