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Sri Lanka tea prices hit by collection fears

July 30, 2008 (LBO) - Prices of Sri Lankan low grown leafy grade teas fell sharply at this week's Colombo auctions owing to fears that buyers may not be able to collect their purchases.
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Tea prices have been buoyed by good demand from traditional buyers like Russia and the Middle East oil exporting countries where consumers have more spending owing to high oil prices.
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Colombo auction prices have been mostly higher than those of other auction centres. Brokers said most of the leafy grade teas remained unsold as local buyers had a fear of collection problems and avoided purchasing large volumes.

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A security clampdown ahead of a summit of south Asian leaders in Colombo later this week has led to travel restrictions, especially near key city business areas.

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Security has been increased owing to fears of attacks by Tamil Tiger rebels with more checks and searches of both vehicles and people.

"In the Leafy grade segment, as expected, low grown leafy grades came down drastically with most of the teas being unsold," brokers Bartleet Produce Marketing said in an auction report.

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"All the local buyers had a fear of collection problems and thereby avoided purchasing large vol

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