Tea crisis easing off

by Lalin FERNANDOPULLE

Demand for tea has risen after auctions resuming for the new year. The crisis in the tea industry is easing off with a significant increase in the prices of low and high grown teas.

The national auction average was Rs. 301 per kg last week which is short of Rs. 23 to reach the corresponding average price of last year.

Chairman, Tea Brokers Association, Sarath Sirisena said tea prices are stabilising since commencing of auctions this year. The national average price last week for the low grown rose to Rs. 319 per kg from Rs. 310 in the previous week.

Demand for tea from key markets dropped drastically following the global financial crisis which is having an adverse impact on many countries. Russia, which is the largest importer of Ceylon tea, reduced the quantum of imports.

Following reduced inventories and the rise in demand for tea Russia has increased buying tea. The Middle East is the second largest importer of Ceylon tea.

"The tea brokers played a vital role during the height of the crisis in the tea industry last year by providing financial assistance to producers to sustain the manufacture of tea", he said.

The Brokers invested four billion rupees in October last year to support the industry during the crisis.

Around 55 to 60 per cent of the national production of tea is funded by brokers which underlines the dependence on the brokers.

Sirisena said the Association welcomes the timely intervention of the government to support the tea industry at a time of crisis with a relief package.