Sri Lanka tea prices up as crop plunges

March 13, 2009 (LBO) – Sri Lankan tea prices rose again at this week’s Colombo auction mainly because volumes had fallen sharply owing to drought but crops are expected to revive with the onset of some rains. Forbes and Walker Tea Brokers said Sri Lanka’s tea production in January 2009 was the lowest in 15 years.

Tea production for the month of January 2009 totalled 17.6 million kilos compared with 26.27 millio kilos in January 2008, down 8.59 million kilos or 33 percent.

“It is relevant to note that the January 2009 crop of 17.6 million kilos is the lowest since 1994,” Forbes and Walker said.

The biggest fall in production came from low grown areas where small farmers were hit hard by the collapse in prices towards the end of last year, followed by a severe drought this year.

Tea growing areas had received some rain in recent days with the prospect of reviving normal harvests.

Forbes and Walker Tea Brokers said tea growing areas on the western slopes of the central hills and in Nuwara Eliya, Uva and Udapussellawa districts experienced bright weather, with a few scattered showers towards the weekend.

Low grown districts in the south experienced slight showers towards the latt