June 04, 2010 (LBO) – Sri Lankan tea prices recovered this week after falling sharply in recent Colombo auctions prompting brokers to say the market appears to have bottomed out. Fears that heavy rains could reduce crops in the southern cultivation areas which produce the bulk of national output have also subsided as rains have eased.
Forbes & Walker Tea Brokers said that although the quality of teas from hill country estates of plantations companies showed no significant change the rise in prices was quite encouraging.
“The upward movement in prices which was witnessed towards the latter part of the last week’s auction continued to show a progressive improvement throughout this week’s auction as well,” they said.
“Consequently, prices on average gained 10-20 rupees a kilo on last week’s closing levels, an encouraging phenomenon notwithstanding the larger volume on offer.”
Therefore, the brokers said, it would be reasonable to conclude that the market, in fact, has bottomed out.
Brokers John Keells said that although crop levels in most planting districts particularly from the ‘Western sector’ reported a drop this week, the factories are still operating a