Tea prices stabilize

by Lalin FERNANDOPULLE

Prices of tea are stabilizing following the increase in demand at the recent auctions and, experts predict that prices would further stabilize in the first quarter of the year. Director-Promotions of the Sri Lanka Tea Board, Hasitha De Alwis said prices of tea at both auctions held in the new year were satisfactory and this trend would continue with prices reaching around Rs. 275-300 per kilogram in the first quarter of the year.

“Auction prices have been good in the new year due to fine plucking and less use of fertilizer”, he said.

The quantity of unsold tea at the auctions was fairly high while there was less quantity of new tea. Around 6.3 million kilograms of tea were on offer at the two auctions concluded this week. He said though the volume of tea is less during the first quarter better quality in the high grown tea variety in Nuwara Eliya and Dimbula and as a result, would fetch a high prices.

Experts predict prices of tea to be satisfactory at next week’s auctions but slightly apprehensive of the auctions to be held during the last week of the month due to large quantities expected.

“Prices of tea will stabilize at a better level following the growth in demand in the Middle East and Russian markets. The prices of tea are not exorbitant and the demand for the beverage will not decline”, De Alwis said. The reduction made on the price of fertilizer is a good move to support the tea industry which has been going through a difficult period. The price of a 50 kg bag of fertilizer was reduced to Rs. 1,000 from Rs. 5,800.The modalities of the working capital loans were also being worked out.

Chairman HVA Group, Rohan Fernando said that there is no reason for the tea market to crash as prices are stabilizing and the situation expected to turn for the better at the end of the first quarter. Tea export income last year exceeded US$ 1.2 billion.