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Sri Lankan tea prices fall

Oct 02, 2009 (LBO) - Sri Lankan tea prices fell at this week's auction, raising concern that plantations corporations may not enjoy the high price levels required to cope with a recent near 40 percent wage hike. Brokers Asia Siyaka Commodities said there was "fair general demand at lower rates" for teas from regional plantations corporation estates at this week's sale.

"The extended spell of price gains came to an end with most categories losing out sharply in value," they said.

Better Western BOP and BOPF type teas grown on the western slopes of the central hills lost 30 rupees a kilo on average while others were 10-20 rupees lower.

Prices of low grown teas, made mainly by small farmers in the island's south, also fell.

"Low Grown teas met with fair general demand, but at lower rates. BOP1/OP1 grades were discounted sharply," Asia Siyaka Commodities said.

Forbes & Walker Tea Brokers said lower demand from buyers for the Commonwealth of Independent States, the biggest market for Sri Lankan tea, was the main reason prices fell.

"The selectiveness in the market which emerged last week was further amplified this week for most categories of tea," they said.

"Colombo and Mombasa

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