Sri Lanka tea trade warns of lower orders, prices

Mar 16, 2012 (LBO) – Sri Lanka’s tea trade has warned that tea export orders and prices could fall in the months ahead as crops rise and consumption falls off in key markets. And smallholders, whose returns have been sharply diminishing, find that their operations are increasingly becoming financially unsustainable, the CTTA said.

“The prognosis for the next quarter is far less favourable. It is usually a high cropping period and, on the basis of current weather conditions, 2012 is expected to surpass the performance in 2011.”

Also India and Vietnam will re-join the supply chain, after the winter break, and, with the onset of summer, the consumption of tea in the two regions that account for the highest imports of Ceylon tea, the Middle East and Russia and the CIS countries, customarily consume less of the beverage.

“This does not portend well for prices,” the CTTA said.

It said the ensuing months reflect an “ominous” scenario for the tea industry. The Colombo Tea Traders™ Association said money raised from an export tax for tea promotion should be spent on promoting the product in new markets like India and China as demand from traditional markets in th