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Sri Lanka tea prices hit by stronger rupee, lower quality

May 22, 2009 (LBO) - Sri Lankan tea prices fell at this week's auction with a sudden strengthening of the rupee adding to downward price pressure caused by bigger volumes and lower quality, brokers said. Asia Siyaka also said tea prices generally declined for most categories due to lower quality following a holiday period.

"The stronger rupee added to the price drops with some buyers caught out by the direction the rupee has moved against the US dollar," they said. Forbes & Walker Tea Brokers said auction quantities showed a further increase this week compared with last and totalled 7.3 million kilos.

"There was good demand although mostly at lower levels," the brokers said.

The quality of offerings from estates run by regional plantation companies were mostly lower compared with the week before and consequently prices eased by 10-20 rupees a kilo and more for the better teas.

But the brokers said there was the continued wide spread demand throughout the sale.

Brokers Asia Siyaka Commodities said the market for most varieties of low grown teas, which make up the bulk of the crop, also fell.

In the Large Leaf catalogues Select Best and Best OP/OPA types eased 10 - 15 rupe

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