Orthodox black tea commands highest prices in the
Tea market active in first half of 2009
Most of Sri Lankan tea markets were initially affected by the
economic recession but tea being an essential beverage the buyers
returned to the market in mid December 1, 2008 and the markets were
active in the first half of this year, said the President of Asia Siyaka
Commodities (Pvt) Ltd, Anil Cooke.
He said that the markets recovered fast because the global supply
declined as a result of dry weather in many producer countries and the
low fertilizer application due to the economic crisis.
Sri Lanka’s orthodox black tea commands the highest prices in the
world market. These teas are popular in the Middle East and North Africa
which absorbed 52 percent of Sri Lanka’s exports. On the other hand,
Russia/CIS countries became the single largest market that buy a fair
amount of Sri Lankan tea, he said.
According to Anil Cooke the Sri Lanka Tea Board confirmed that tea
production until the end of May this year was 105m kgs which was a 21
percent decline compared to 2008 production of 144 m kgs for the
corresponding period. As many of the plantation companies incurred heavy
losses during the period, the market increase was not sufficient to
compensate for the production shortfall.
The market for tea not only increased at the Colombo tea auction, but
also increased in Mombasa in Kenya and the main tea auction centres in
India as well. Indonesian prices too had increased but the Jakarta
auction increased the prices thereafter.
The prices of tea at the Colombo tea auction are high at present but
one has to consider the cost of production because there has been a
significant drop in tea production. The drop in production from January
to May this year was 105, 547,818 kgs compared to 144,401,428 kgs during
the corresponding period last year. The highest decline in production is
from the low grown elevation. The national drop in production from all
elevations is 38, 853,610 kgs, said Chairman, Private Tea Factory Owners
Association, Anil Perera.
He said that Sri Lanka has to expand and increase its promotional
activities and make the funds available to accelerate those activities
as the strategy to face the competition in the world market.
Managing Director, Forbes and Walker Tea Brokers (Pvt) Ltd, Y.
Fernando said that Sri Lanka is experiencing a global shortfall of
approximately 80 m kgs compared to January-May 2008/09.
“We believe that most of the buyers will be fairly tight stocked,
given credit and trading conditions over the past 6 - 9 months.
Therefore, the current demand levels should be sustained,” he said.
The decline in tea production would have been mainly due to the
climatic change and the reduced usage of fertilizer owing to high cost
or the escalation in petroleum prices in 2008, Fernando said.