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Sri Lanka tea aid dispersal slow: official

July 10, 2009 (LBO) - A Sri Lankan government aid package for the tea industry to recover from a crash in prices is being disbursed only slowly, a senior industry official said.
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The industry faced cash flow problems as large volumes remained unsold at the auctions at the time and buyers reneged on contrcats.

That crisis was worsened by severe drought earlier this year which sharply reduced the crop the hit sales of tea producers. Sri Lanka tea board chairman Lalith Hettiarachchi said the regulator had evaluated and recommended to banks over 400 applications from regional plantations companies and private tea factory owners.
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The recommended loans have exceeds two billion rupees.

But there were still delays in the banks disbursing the money, he said.

"There are less than 200 million rupees of recommended loans processed by banks."

Hettiarachchi said the banks themselves probably faced liquidity problems given the credit crisis.

Tea industry officials had also complained banks were insisting on collateral to disburse the funds which were required to tide over cash flow probles created by the collapse of commodity prices late last year.

Under the

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