Apr 29, 2011 (LBO) - Larger crops following heavy rain and a drop in quality dragged down Sri Lankan tea prices at this week's Colombo auction although the biggest harvest has eliminated a crop deficit, brokers said.
"There was fair general demand mostly at lower levels for Low Grown varieties at this week’s auction," Asia Siyaka Commodities said.
Low growns make up more than half the tea crop and are cultivated mostly by small farmers.
There was fair general demand at lower rates for teas from the estates of plantation companies with the market easing further as the sale progressed, the brokers said.
Prices of some teas on the 'Western' region fell by 20-30 rupees a kilo while those from the 'Uva' region fell 40 to 50 rupees.
John Keells brokers said Sri Lanka tea crop for March at 33.3 million kilos was the highest on record, surpassing the previous best of 32.4 million kilos in 2008.
"The phenomenal crop increases in March has helped, recoup the crop deficit of 9.3 million kilos as at end-February in addition to registering a 2.9 million kilo surplus to end-March."
Frequent rains in the first quarter of the year, usually a dry period, helped increase crops.
"With such high crops presently being experienced it is unlikely that we would see a rush in the months of April and May," John Keells said.
"The large crops coupled with a drop in product quality have taken a toll on prices" at this week's sale, the brokers said.
source - www.lbo.lk
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