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Sri Lankan tea prices tumble at Colombo auction

Oct 21, 2008 (LBO) - Sri Lankan tea auction prices tumbled Tuesday amidst a collapsing global commodity bubble, though brokers said volumes picked up and an approaching winter was likely to bring more buying interest.
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"We're confident that, while the market won't go back to pre-currency drop rates, demand will pick up and stocks will begin to move because this is the high consumption period with winter buying," said Cooke of Asia Siyaka Commodities.

Tea exporters association chairman Jayantha Keragala said fears of a global recession and the slow down in western economies had also affected demand, as had poor quality teas.


Erratic weather conditions in western markets had reduced consumption which usually rises in the cold months, he said.

Keragala said buyers were adopting a wait-and-see policy given the uncertainty in the markets and the slide in all commodities.

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"Unfortunately, the recession came in when holidays for Ramazan in middle eastern countries were trailing off.

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Then the devaluation came. All those factors are taking their toll on the Colombo market.
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"

The availability of poor quality teas at the auction had also brought down prices while the availability of credit had also tig

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