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Sri Lanka tea prices maintain upward trend

Jan 14, 2009 (LBO) - Sri Lankan tea prices rose again at this week's Colombo auction on strong demand with brokers saying the trend augurs well for producers who saw the market crash towards the end of last year.
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"The market continued strong for Low Grown varieties," Asia Siyaka Commodities said in a report on the sale of January 12-13. "However, demand was more selective this week."

Forbes and Walker Tea Brokers concurred saying "there was excellent demand."

"The continued bullish trend in prices would be encouraging for the producer sector particularly in the backdrop of extremely weak market conditions experienced during the latter part of 2008."

Prices plunged at the Colombo auctions last October with the bursting of the global commodities bubble, creating cash flow problems for producers and cultivators with large volumes being unsold.

Analysts said they expect the market to recover somewhat in the first quarter of this year because of a shortage in crop and also because of better quality teas on offer.

However, Forbes and Walker Tea Brokers said, they were concerned about the narrow parity between the better teas and their poorer counterparts at this week's sale.

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