Sri Lanka’s tea output dips in 2007, prices up

Jan 25, 2008 (LBO) – Sri Lanka's tea production for 2007 fell by six million kilograms to 304 million kilograms as bad weather and the lagged effects of a strike hit production in the early part of the year, brokers said. Tea prices at the Colombo auctions have remained high in recent weeks and there was strong demand at this week's sale as well, with some types of tea similar to Kenyan varieties rising.

But it was not yet clear whether there is any direct impact from the violence in the east African country which has disrupted production and shipments there.

"Extremes of weather such as extended dry spells followed by heavy showers, together with reduced fertilizer application were the main factors that contributed to low production in 2007," brokers Asia Siyaka Commodities said.

Last year's output was the lowest since 2003.

The island's highest production was in 2005 when it made 314 million kg.

Forbes and Walker Tea Brokers said most of the fall in 2007 production came from low grown teas, which account for the bulk of the crop and are much in demand in key markets like the Middle East and Russia.

Low grown production in 2007 fell 6.5 million kg to 176.8 million kg and was compensated by