Oct 23, 2008 (LBO) – Sri Lankan private tea factory owners are asking for a six billion rupee bank over draft bailout package to help them get over the crisis caused by the crash in prices.
“The sudden, massive drop in prices and large quantities of that category of teas offered remaining unsold either because bids are very low or there are no bids is very uncommon,” said Samaraweera.
Prices at the auctions have fallen by almost 100 rupees a kilo in the last three or four months.
“When teas are unsold and prices come down factory owners do not have enough cash to pay small holders,” Samaraweera said.
Herman Gunaratne, a low grown tea cultivator and factory owner, said overseas buyers were having problems financing purchases because of the global economic turmoil.
He said more regulatory controls were needed to prevent oversupply and unhealthy competition.
He said 65 percent of the island’s tea is made by smallholders.
Sarath Samaraweera, of the private tea factory owners association, said they were also asking for a moratorium on repaying ex