Sri Lanka tea demand perks up after devaluation

Dec 02, 2011 (LBO) - Demand for Sri Lanka's low grown teas, which make up the bulk of the crop, perked up at this week's Colombo auctions after increased orders from key overseas buyers and the snap devaluation of the rupee, brokers said. "Despite Sri Lanka tea production in the month of October recording a significant shortfall of 4.1 million kilo compared to the corresponding month of 2011, widening the to-date deficit by 2.3 percent, revenue from tea exports in 2011 is expected to exceed last year's performance."

Revenue from Sri Lanka™s main agricultural export crop is expected to hit 1.5 billion US dollars in 2011 compared to 1.4 billion last year.

Sri Lanka™s earnings from tea exports have risen 3.1 percent to 973.1 million US dollars in the first eight months of 2011. And despite a lower crop compared with last year, brokers said export earnings in 2011 were likely to exceed that of 2010.

"There was good demand at firm to dearer rates," Forbes & Walker Tea Brokers said, attributing the rise to more winter buying, the cheaper rupee and reduced forthcoming auctions.

"This market phenomena could be attributed to improved buying interest from Russia and the Commonwealth of Independent States, and the recent de