Tea prices expected to move up, say brokers

Inroads made to China, US markets

By Steve A. Morrell

Over the past few weeks auction volumes of tea sold were about 8 million kilos. Prices were not that attractive but sale results this week were decidedly improved, brokers said and general consensus was that the bottom had leveled out prices would again see a progressive upsurge.

Director Lanka Commodity Brokers Ltd., Jehan Algama, said going by positive demand for most Ceylon Tea destinations "we could again breath easy". However he cautioned that there should not be any euphoric reaction to what the market was this week.

"This week’s sale was good," he said. "Westerns saw renewed demand from Japan, South Africa, UK, Europe, specifically Germany, Hong Kong, and also China."

He said China’s entry was an interesting phenomenon. "There was growing demand for black tea, surprising because China was also producing tea. China’s entry at the Colombo auctions was a good sign," he said.

Low growns too had zestful demand particularly to Turkey, Syria, and Tunisia.

Although volumes were large, demand had been further established particularly because quality too was maintained. Things were beginning to return to normal, brokers said.

Algama said value addition was now taking on new dimensions. Walter’s Bay, a company based in Huston, USA, purchased Green Valley, a factory in the Gampola District, manufacturing value added products, which had shelf value in the US exceeding $15 per kilo, Usual retail prices in the US was around $5 per kilo.

"The market at long last had again been established," Algama said.

source - www.island.lk