Sri Lanka tea prices soar amid rupee fall, tight supplies at Coronavirus e-auction
ECONOMYNEXT- Sri Lanka’s tea prices rose sharply at an auction held amid Coroanvirus curfews with a falling rupee, strong demand from abroad and tight supplies after dry conditions in farming areas, an industry officials said.
“With the auction prices we can see that there’s a huge demand for Sri Lankan tea,” Dinesh Fernando, Executive director, Ceylon Tea Brokers said.
“We say that because usually the market price moves up by around 10 or 20 rupees and very rarely by 30 to 40 rupees.
“We see some teas have gone up more than 150 rupees.”
Prices have gone up across the board, from low, mid to high growns. Sri Lanka did not have an auction on March 25 as scheduled over anti-Coronavirus measures.
The first automated e-auctions in place of physical auctions is now being adopted, changing a 137 year old tradition in a bid to continue operations.
Unlike other export industries tea had not seen a fall in demand from foreign buyers, though volumes were down.
“However, due to the lapse there is now a ‘tea starvation’ in play too,’ Fernando said. “Since the rupee depreciated automatically the market will move up in price because of it.”
“There are more inquiries from other countries for tea and they have not cancelled any of the orders placed two weeks ago, “he said.
“Demand was still in place despite a lapse of almost 15 days without an auction
Meanwhile, active participation from buyers were seen in the e-auctions held so far.
Bigger and smaller buyers were equally active.
Fernando said that unfavorable weather impacted the output however, though the government was encouraging the plantations sector to run during curfews.
“The government has given special preference to tea sector,” he said. “Therefore, we manage to carry out trading where the factories send us the consignments and the buyers also have got their curfew passes for collection.”
Tea brokers currently are working with a skeleton while practicing social distancing within their work.
The rising prices will help improve cashflows of the industry he said.
Tea factories are expected to close from April 10 to 16 for the Sinhala and Tamil New Year. (Colombo/Apr08/2020)