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Sri Lanka tea industry hopes for better prices in January

Dec 30, 2008 (LBO) - Sri Lanka's tea market is expected to recover somewhat early next year with a long break in the Colombo auctions and production shortfalls in other origins keeping demand buoyant, officials said.

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The slowdown in tea exports from African origins is also expected to keep demand buoyant.

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Tea output in Kenya, the world's largest exporter, was down by 35 million kg up to September 2008.

Indian tea producers also expect higher prices early next year, media reports said.

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Bucking the trend in commodity prices, the tea season in 2009 is likely to open 20-30 Indian rupees per kilo higher than the previous year™s average, the Business Standard newspaper said.

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It quoted industry representatives as saying they expect prices of good Assam tea to open higher in the new season.

"The strong opening would be led by a shortfall of 30-40 million kg," the newspaper said.

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The Indian Tea Association (ITA) projections for 2008 indicate production of 962 million kg, exports of 200 million kg, imports of 20 million kg and consumption of 825 million kg, indicating a shortfall of 43 million kg.

Indian tea prices have moved up in the last few months, but are still lower than the p

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