Apr 21, 2011 (LBO) - Sri Lankan tea prices were firm at this week's auction with brokers saying Libya had resumed buying and global prices seen staying high this year owing to lower production and growing demand.
Despite the large volume of teas from plantation company estates on offer and "somewhat lower" quality prices were "fairly stable" when the Colombo auction resumed after last week's break for new year holidays, brokers John Keells said.
A few good teas from estates on the western slopes of the central hills sold in excess of 400 rupees a kilo with the bulk of the teas being sold between 350 - 370 rupees on average.
The low grown teas, that make up over half the crop, "met with very good demand," John Keells said.
"It was encouraging to see Libyan buying and also strong Iranian buying after their New Year break. Russia too was quite active with the Syrian buyers purchasing quite aggressively."
The brokers said tea prices at the Colombo auctions had held up in the first three months of 2011 and even increased over 2010 averages.
The national average of 393.92 rupees a kilo in the January - March 2011 period was the highest for a first quarter of any given year exceeding the previous best of 382.90 rupees last year.
Production shortfalls in major exporting nations and rising consumption also meant prices were likely to remain high this year as well.
"World tea prices are expected to remain moderately high in 2011 due to the rise in world tea consumption and sluggish world tea production," John Keells said.
China and India with their large population and growing income levels will make a contribution to the rise in the world tea consumption.
"These two countries with their increasing populations will contribute to increase local consumption of tea thereby reducing their exportable surplus."
Crops figures for 2011 suggest a global fall, with Kenya and Sri Lanka not expected to maintain the record levels achieved in 2010.
All major producing countries including India have experienced tea crop shortfalls in 2011 to end-February which could increase demand in 2011, the brokers said.
source - www.lbo.lk
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