Monday, April 16, 2012

Sri Lanka tea prices rise again

April 12, 2012 (LBO) - Prices of Sri Lanka's low grown teas, which account for the bulk of the crop, rose again at last week's auction and are now well above last year's levels, brokers said.

 A shortfall in crop in key growing countries owing to bad weather could also help prop up prices.
 Brokers John Keells said there was good demand for teas grown at both high and low elevations.

The 3.1 million kilos of low grown teas that came under the hammer last week met with "exceptional demand", the brokers said in a report.

"The low grown sale average once again advanced by approximately 29 rupees to reach 424/90 rupees a kilo.

"The current averages are well above the corresponding figure of 2011. With the prevailing strong market, the unsold quantity at the weekly auctions are few and far between."

The brokers said there was "excellent" demand from Russia, Iraq, Libya, Syria and other Middle Eastern markets.

Unusually dry weather in key growing regions have also reduced crops.

"In view of the present adverse weather conditions, global crop production looks bearish with Kenya, Sri Lanka and North India set to record much lower crops compared to the first quarter of last year," John Keells said.

 "Taking these factors into consideration, it would be interesting to see the impact of the crop shortfall on prices in the coming months."

Most of the major black tea producing countries have reported extremely dry and humid conditions in the first quarter of 2012, the brokers said.

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