Sri Lanka Tea Earns a Record High in October

04th December 2009, www.lankabusinessonline.com

Sri Lanka's tea export earnings in October hit a record high and average auction prices this year were much higher than in the last two years, although shipments were down owing to production problems, brokers said.

Prices at this week's Colombo auctions fell sharply owing to lower quality and less demand although a global tea shortage is likely to keep prices buoyant in the short term, they said.

Brokers Asia Siyaka Commodities said October tea exports from the island fell marginally to 25 million kilos from a year ago.

"The rupee value of exports in October 2009 is the highest ever at 13.3 billion rupees, 17 percent more than the previous high of 11.6 billion rupees earned in 2008," they said.

Earnings for the year reached 110.7 billion rupees, on a quantity of 239 million kilos exported, down six percent on the 2008 record earnings of 118.9 billion rupees earned from exports of 270.8 million kilos.

The approximate US dollar value of earnings for the January-October 2009 period was 963 million, 12 percent lower than in the same 2008 period.

But brokers said average prices at the Colombo auctions have stayed much higher than in the last two years owing to a global shortage caused by production shortfalls in key producing countries, especially Sri Lanka.

At the sale in the last week of November the average price was 3.37 dollars a kilo compared with 2.03 dollars at the same sale in 2008 and 2.88 dollars a kilo in 2007.

The year-to-date average price of tea was also higher at 3.14 dollars a kilo compared with 2.91 dollars in 2008 and 2.45 dollars a kilo in 2007.

Forbes & Walker Tea Brokers said there was less demand at this week's auction and consequently lower prices all round.

In teas from plantations company estates overall quality levels showed a decline resulting in a greater volume of teas on offer comprising of "Fair Average Quality", they said.

"Consequently, the price parity between the better teas and the below best varieties narrowed down, whilst the increased volumes continued to put downward pressure on prices for all others."

Prices of low grown teas, which account for the bulk of the crop, also fell, dropping by 10-15 rupees a kilo for most types.

Image courtesy of lakdora.com

Sri Lanka High Grown Tea Prices Rise

17th October 2009, www.dailymirror.lk

Prices of Sri Lanka's high grown teas rose at this week's Colombo auctions with brokers saying the market is likely to remain buoyed by a continuing global shortage.

Some teas grown on the estates of regional plantations companies fetched record prices but many teas from the low grown regions fell, brokers said.

"Growing conditions in most producer countries are still far from ideal," Forbes & Walker Tea Brokers said.

"Therefore, taking into considering the global shortfall in production as of now, it is unlikely that we would witness any significant correction in prices in the near future."

Tea production in Sri Lanka and the other main export origins, Kenya and Indiam have been reduced sharply by drought.

The global production shortfall has put upward pressure on tea prices, both in auctions at export origins, as well as in consuming countries.

The brokers said fairly strong buying from shippers to the Commonwealth of Inpendent States and the tea bag sector were the main contributory factors for the enhanced prices.

Brokers Asia Siyaka Commodities said 'Better Western BOP' type teas gained 10-20 rupees a kilo on average at this week's sale.

Some high grown teas fetched record prices such as an invoice of the 'BP1' type of Abbotsleigh Estate, owned and managed by Watawala Plantations, which rose to an all-time high of 455 rupees a kilo, from the previous record of 395 rupees.

An invoice of 'Fannings1' off-grade tea from Strathspey Estate, part of the Richard Peiris plantation group, fetched a record high of 440 rupees a kilo.

However, prices of most low grown teas, produced mainly by small farmers in the southern low lands, fell at this week's auction.