Sri Lanka tea prices down; quality improves, volumes fall

Nov 20, 2008 (LBO) – The quality of black tea production in Sri Lanka has improved while quantities are coming down, as producers tightened standards in response to the crisis caused by the collapse in prices, brokers said.

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“Reduced crop intakes and the continued resolve of tea factories to source only the finest leaf, have led to lower quantities of teas being manufactured and dispatched for sale,” said brokers Asia Siyaka Commodities.

“The quality of the end product has also improved considerably over the last few weeks and should augur well for stability in the market.”

The authorities have been urging producers to produce better quality tea to reduce volumes and revive demand.

They said some producers, especially small farmers in the south producing ‘low grown’ teas, had been plucking more than the usual two leaves and a bud when prices were high to maximise profits.

But industry officials said such an approach would be counter-productive now as the market had crashed along with the collapse of the global commodities bubble.

The brokers said that although a comparatively high