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| Tuesday, 30 March 2004 |
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Hingalgoda and Kalubowitiyana top Low Country tea prices by Steve A Morrell Hingalgoda and Kalubowitiyana Small Holder tea factories have topped the Low Country tea market, with prices for Cut Twist and Curl (CTC) Pekoe Fannings 1 in the Ex-Estate catalogue. Hingalgoda fetched Rs. 380 per kilo and Kalubowitiyana sold the same grade at Rs. 400 per kilo. Both factories serve the Tea small holders in the Galle District. These prices will benefit Small Holders who supply leaf to these manufacturing plants, because payment for green leaf depends on the factory net sales average. Both Factories have consistently produced good low country teas, and these prices for their CTCs although 40% of their production, (for Hingalgoda) increased the net sales average considerably. Hingalgoda is managed by John Keels Holdings and Tea Small Holders. Supply of green leaf is 100% from small-holder properties. Smallholders in the Galle district have been in the tea business for generations, and have now achieved a degree of perfection in their planting methods that they now produce 55% of the country's total tea production. Most of them work their own holdings as a family business, and more importantly they adhere to the basics of tea growing and culture with timely application to usual agricultural practices. The Tea Smallholder Factories Ltd., manage Hingalgoda and 10 other factories. This organisation has a well co-ordinated advisory service which visits smallholdings regularly to advice on routine field practices. "It was quite a job to have them supply good quality leaf to these factories. It took us about four years to have them accept the realities of good leaf supply and also the rewards that would accrue," said a source from the brokers. The cost of production of a kilo of green leaf, including all cultural inputs was at the very most Rs. 12 per kilo, he said. Both these factories, because of their outstanding prices have a net sales average of Rs. 196.37, on Hingalgoda and Rs. 226.44 on Kalubowitiyana. (These are average prices for 2004 to date), he said. These prices, when applied to the Tea Commissioner's, green leaf payment formula, gives the smallholder Rs. 28 per kilo of green leaf supplied. Therefore this gives the smallholder a clear profit of 110% per kilo. Yields on these smallholdings vary from 2,500 to 3,000 kilos per hectare. Profits achieved by the Smallholders therefore are quite substantial, he said. Hingalgoda and Kalubowitiyana are in the Hiniduma sub district, which is considered the hub of the planting sub districts in Galle, he said. Kalubowitiyana particularly is a 100% CTC producer, and is usually bought by the local tea traders. Tea produced ex these factories could be compared to good Assams. |
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