Tea prices increase, low quantity hampers exports

by Lalin FERNANDOPULLE

Tea prices have increased but the drop in export volumes will not auger well in the long-term for the industry, National Chamber of Exporter's sources said.

The average tea price at the Colombo Auctions last week was Rs. 384 per kilogram.

High Grown fetched Rs. 370.35, Low Grown Rs. 395.30 and the Middle Rs. 350.30 per kgs.

The Chamber sources said that in the short-term growth in tea export market prices could be good but would not hold sway for the industry which exports a low quantity. "Sri Lanka's tea exports will be less competitive in the middle to long-term if the quantity of exports are kept low", he said.

Tea exports last year slumped by nine per cent or 31.1 million kgs to 289.6 million/kgs while value wise the dip is lesser from Rs. 136.16 billion from Rs. 137.5 billion in 2008.

Tea brokers said the quantity of tea exported last year was the lowest since 2000 where total exports amounted to 287.9 m/kgs.

Tea in bulk and in packets have decreased year-on-year but tea in bags recorded a growth compared to the corresponding year. Tea exporters said maintaining low export volume helped gain higher prices and increased demand for quality teas.

Exporters are jittery over tea Cess Funds not being ploughed back to the industry in a proportionate way that would encourage more exports.

The slow recovery of the global economic crisis and lack of incentives to promote exports are concerns of tea exporters.

CIS continues to be the largest importer of Sri Lankan tea followed by the UAE, Syria, Kuwait, Iran, Turkey and Jordan.