Sri Lanka tea prices up again on supply shortfall

Sept 25, 2009 (LBO) - Prices of Sri Lanka's high grown teas made by plantation firms rose again at the Colombo auctions this week owing to supply shortages, brokers said. The local crop has been affected by drought earlier this year followed by recent labour union action that disrupted production and transport of made tea from estates owned by listed plantations companies.

Supply shortages caused by drought in other origins like Kenya and India are seen keeping tea prices strong, brokers said.

"This week's auction quantities showed a marginal decline," Forbes & Walker Tea Brokers said.

"Another week of good demand, though an element of selectiveness was evident."

They said most other auction centres too have experienced a "buoyant market" with some degree of selectiveness.

There was good demand for high grown teas at the Colombo auctions.

"Prices commenced at a firm to dearer note, although the same tempo was not maintained towards the close. The limited availability of BOP (varieties) continued to meet strong demand and often gained 5-10 rupees a kilo all round."

Bartleet Produce Marketing said there were signs of a shortfall in vol