Demand for tea will increase soon

Harshini Perera

The demand for tea will increase very soon since the world is coming out of the recession said Chairman, Colombo Tea Traders Association, Avindra de Silva. He said that high prices were recorded from Uva’s seasonal quality teas. The demand for tea will increase very soon since the world is coming out of the recession and people are getting ready for the winter season. One significant factor of the tea auction at present is that there is a weekly fluctuation because people buy tea based on their requirements.

Therefore, Sri Lanka can expect better markets in the CIS and Middle East countries, by the end of this year, he said.

The tea prices from January to July this year are below compared to the prices fetched last year. This was due to the recession, he said.

He said that even though the low grown tea prices increased from Rs. 10 compared to last year, the high grown tea prices are low this year. Therefore, there is a production drop of 41 mkg in all elevations compared to last year. This has badly affected the plantation companies, since their fixed costs are high. They will have to face a hard time in the future to maintain their plantations.

The total export revenue up to June this year dropped from 10 percent compared with the previous year and resulted in less production due to the weather patterns and various decisions taken to counter the effect of recession by various tea markets, he said.

Sri Lanka exports tea in value-added form directly to the consumer as retail packets. Hence Sri Lanka caters to the demand of over 45 percent of tea production in consumer packets in the global market. The tea prices were US$ 0.80 per kilogramme above Kenya last year and the same trends will continue this year as well, he said.