Feb 26, 2010 (LBO) - Sri Lankan tea prices at the Colombo auctions fell for the second week running this week on bigger volumes and lower quality, although production was recovering, brokers said.
Teas from estates, mostly run by regional plantations companies, fell 20-40 rupees a kilo, they said.
"Overall quality of offerings was lower to previous with the fair weight of the offerings comprising of fair average quality teas," Forbes and Walker Tea Brokers said in a market report.
"Therefore, this week's decline in prices could be attributed to a combination of the large volume and the relatively uninteresting quality of teas on offer."
Brokers Asia Siyaka Commodities said that in low grown teas, made by small farmers and which make up the bulk of output, prices also fell.
"There was a large weight of primary low grown teas on offer at this week’s auction. In the 'Large Leaf' catalogues there was better demand although at lower levels of price."
Tea producers have been enjoying high prices in recent weeks because of rising demand and a continuing global shortage.
Tea production fell last year because of drought and production disruptions in major exporting countries.
Asia Siyaka Commodities said Sri Lanka's January output indicated a recovery in the island's production, especially among small farmers cultivating the low grown teas mainly in the south.
"Good cropping conditions combined with fertilizer application and high green leaf prices ensured that small holders as well as estates optimized green leaf intake in the month."
source - www.lbo.lk
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