Global shortage to keep tea prices high, Sri Lanka broker says
ECONOMYNEXT – Tea prices are expected to remain high for the rest of the year with production shortfalls in major producing and exporting countries, tea brokers John Keells said.
Tea prices globally are expected to increase this year due to reduced output in India and Kenya, they said in a report.
Kenyan tea output was down 31 percent or by 56 million kilos up to April 2017 from a year ago.
Indian production was down 16 percent in the first quarter of 2017 from the same period last year.
“Global prices are already up 15 to 20 percent,” John Keells said. “Prices are expected to remain firm for the rest of 2017, though improved weather could boost Kenyan production in the second half of the year.”
Production in Sri Lanka is likely to be further reduced by the floods and landslide triggered by torrential rain in May 2017, especially in the southern tea growing areas.
“Factories that were affected are still recovering from the damages and the current inclement weather will also have a negative impact on the production and quality,” John Keells said..
The brokers said crops intakes in the Low Grown areas of the south were lower.
“In addition, due to the critical situation the region had to undergo during the previous weeks, factories reported a shortage in labor workers for harvesting and factory work has become an issue.”
(COLOMBO, June 15, 2017)