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Sri Lanka tea prices up on winter buying

Officials from K. Seeds Investments Pvt Ltd (at left) with officials from Commercial Credit and Finance PLC (at right)

Nov 04, 2011 (LBO) - Buying for the winter mainly by Russia helped prop up tea prices at the Colombo auctions this week although they are expected to come down once demand tapers off, brokers said.
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There was demand both for tea from estates as well as low grows teas made by smallholders.

"With the knowledge that rains have now set in, buyers were eager to secure the better teas on offer, and the leading buyer of liquoring teas was seen to bid actively," brokers John Keells said in a report.
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Russian interest was the dominant factor on the BOPF type teas.

"Russian winter buying may have reached a peak, whilst some of the pre-Christmas orders for the west may have been completed," John Keells said.

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"Colombo prices for the best BOPF are higher than the best CTC PF1 teas in Mombasa and the same goes for the medium quality teas," they said.

"Hence, no sooner the demand from Russia slows down, there will be downward pressure on prices, and an increase in quantity or a drop in quality will exacerbate the situation.

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"

Prices had slumped in recent weeks especially for low growns, which make up the bulk of the crop, with unrest in key markets in the Middle East and North Africa an

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