Tea prices attractive despite production drop

Hiran H. SENEWIRATNE

TEA: Sri Lanka's tea production during the last six months of this year has dropped by Kg 3.3 million compared to last year's. Last year's production was the highest ever-recorded production in the recent past, industry sources said.

The high fertiliser prices contributed to this but prices have become attractive considerably due to a shortfall of global tea production, Vice President -Asia Aiyaka Commodities (Pvt) Ltd Dinal Fernando told the Daily News.

He said last year tea production during the first six months of the year recorded 165.7 million kg while this year production was 160.25 million kg.

Further, Sri Lanka is now in a more advantageous position globally due to the shortfall of tea in the international market. Most international buyers are now focusing at Colombo.

It is said that there is a 40 million kg shortfall of tea production owing to the Kenyan drought, which impacted the entire tea industry, he said.

According to tea reports, where the high grown tea is concerned, it is now fetching attractive prices. It now fetches Rs. 32 to 35 higher than last year's prices. Medium grown tea also recorded a considerable price increase compared to last year.

Tea being a buyers market is going through a fairly good period due to the high demand for tea in the international market.

He said that due to the high fertiliser prices most teaholders refrain from applying fertiliser resulting in a drop in production and quality of tea in the medium to long term basis, Fernando said.