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Sri Lanka tea board to buy again at auctions

Nov 03, 2008 (LBO) - Sri Lanka's tea board said it plans to buy stocks at the Colombo auctions this week as well to help prop up the market after prices crashed and large stocks went unsold last month.
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Tea board chairman Lalith Hettiarachchi said they would continue to intervene in the market in future as well if required to cope with the crisis caused by the sudden plunge in demand and prices.

Last Tuesday, the tea board bought stocks worth 231 million rupees at the Colombo auctions, a quantity that amounts to about 15 percent of the total auction quantity.

The move was in response to the crisis caused by the sudden drop in demand for Sri Lankan tea because of the global economic crisis.

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The crisis was cause mainly by restrictions in credit in major buying countries and the depreciation of the currencies of major buyers like Russia and Iran.

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The problem, which affected mainly low grown teas that are in demand in Russia and the Middle East, hit small farmers who grow the leaf and factories which make the black tea.
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Hettiarachchi told our sister news website

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