Sri Lanka could see tea prices easing next year

Dec 23, 2009 (LBO) – Tea export countries like Sri Lanka could see prices easing next year as better weather improves crops and reduces the global shortfall that drove prices higher in 2009, the Food and Agriculture Organisation has forecast. Tea prices reached a record high in 2009, but should ease next year as weather improves in the main tea-producing regions in Asia and Africa, the United Nations agency said in a statement

The agency™s Tea Composite price, the world™s indicator for the price of black tea, reached a high of 3.18 US dollars a kilo in September as India, Sri Lanka and Kenya experienced droughts while demand surged, compared to an average price of 2.38 dollars a kilo in 2008.

Sri Lanka’s shortfall in crop accounted for much of the global shortfall.

Although crops have been catching up, production in other origins have recovered faster than on the island.

FAO said that there are concerns that producers could plant more crops to take advantage of the current high prices, flooding the market with tea.

Some producing countries, such as India, have acted responsibly and announced that they would not be expanding current tea areas beyond what is required for replanting and rehabilitating existing t