July 13, 2007 (LBO) – Sri Lanka’s low grown tea prices have surged owing to strong demand from key buying countries and a shortfall in the crop, brokers said. Prices of low grown teas, grown mainly in the low country districts and by smallholders, have been climbing steadily for the past one year.
But the low grown auction average price has risen sharply in the last few months and is now close to 300 rupees a kilo.
Some invoices have been fetching record prices in recent auctions, brokers said.
They said the rise in auction prices was because of a combination of reasons.
The main reason was a shortfall in the crop caused by bad weather, which meant that with demand remaining strong, prices were bound to rise.
Strong demand from key buying countries like the Middle Eastern nations and those in the former Soviet Union, which have developed a taste for low grown teas, was another reason.
A third reason for the sharp rise in Colombo auction prices was the depreciation of the rupee which has fallen sharply against key trading currencies like the dollar.
Anil Cooke, of brokerage Asia Siyaka Commodities, said the low grown produ