Sri Lanka tea prices firm despite weaker currencies of importing countries

Jan 28, 2009 (LBO) – Sri Lankan tea prices at the Colombo auctions this week maintained their upward trend with demand strong despite the weakening of the currencies of key buyer countries like Russia, brokers said. Supply was tight because of dry weather in key origins while demand remained strong because of winter in the main consuming countries where stocks had also been run down, they said.

Tea prices have been on the upswing for the past three weeks since the first sale of this year after crashing towards the end of last year with the collapse of the global commodities bubble. .

“There’s no sign (of the upward trend) diminishing right now although there are some price corrections for some grades. But by and large, we’re seeing more demand,” said Anil Cooke, president of tea brokers Asia Siyaka Commodities.

Teas from the high grown elevations were on sale Wednesday with those from low grown areas being sold Tuesday.

“We’re selling a fairly large volume of tea as well and the collection of tea stuck in the pipeline is being cleared.”

Auction volumes have been high so far this year with the backlog of teas unsold last year being cleared but quantities are expected to fall from next week,