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"The general trend of declining prices witnessed from the second half of 2011 is expected to continue in the foreseeable future," tea brokers John Keells said in a report.
In January and February 2012, sale averages at all elevations remaind lower than last year's values for the same period "as political turmoil and economic sanctions in the Middle East hinder the most important market for Sri Lanka™s low grown teas," they said.
Low grown teas, cultivated mainly by small farmers in the south, account for the bulk of the crop.
Countries such as Iraq, Iran, Syria and Libya together account for 55 percent of the export market.
"The recent international trade sanctions imposed on Iran and Syria are beginning to take effect due to restricted access to international financial systems," the brokers said.
"It is reported that Iranian importers are unable to guarantee payment, for imports of rice, wheat, tea, corn, and palm oil among others and will soon ground to a halt.
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