Sri Lanka tea prices recover slightly after steep fall

Dec 10, 2008 (LBO) - Prices of Sri Lanka's low grown teas recovered slightly at this week's auction after plunging for several weeks but it was not clear if they had bottomed out. Teas from the high and mid-grown elevations produced mainly by listed regional plantations companies fell mainly because of lower quality.

Forbes & Walker Tea Brokers said the quality of offerings from these elevations "were relatively uninteresting with only a handful of invoices maintaining reasonably all round quality.

"Consequently, teas in the 'higher price' bracket witnessed a fairly significant decline whilst the price structure for the others tends to fluctuate following variations in quality."

Hettiarachchi said the Tea Board had intervened only once to prop up prices of low grown teas at the auctions.

It spent 232 million rupees and bought almost a million kilos of teas with a refinance facility provided by the Central Bank through the state-owned Bank of Ceylon.

Stocks bought by the board would be resold at staggered intervals in future auctions, Hettiarachchi said.

He also said the government had set up a stabilisation fund with an initial capital of 225 million

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