Sri Lanka tea prices to end down in 2018: Central Bank
ECONOMYNEXT – Average prices at auctions in Sri Lanka’s capital will end down 2018, continuing a trend seen so far in the year, the Central Bank has said.
Average prices at the Colombo Auction are projected to be 587.76 rupees per kilogramme for 2018, compared to 620.44 rupees in 2017 or down 5.3 percent, a central bank report said.
For the first six months of 2018, the average tea price had been 605.17 rupees, down 2.2 percent from a year earlier.
"The highest decline was recorded for medium grown tea (5.5 percent), followed by high grown tea (2.9 percent) and low grown tea (1.7 percent), during this period," the central bank said.
In the four months since, tea prices have fallen even sharper, which would drag down the average from the 620.44 rupee average in the first 6 months.
Average prices in July fell 9.6 percent from a year earlier to 535.8 rupees per kilogramme.
Sri Lanka’s rupee has also fallen this year as an unstable soft-peg came under pressure. A falling rupee tends to push up the price of all traded goods, including exports.
John Keells Tea Brokers said that prices in August fell 12 percent to 534.02 rupees, in September down 15.3 percent to 537.77 rupees and in October down 9.3 percent to 586.19 rupees.
The average export price of tea increased 4 percent from a year earlier to 828.13 rupees per kilogramme in the first six months of 2018.
The central bank is projecting export prices to be 817.04 rupees for the entirety of 2018 an increase from 807.44 rupees a year earlier.
Meanwhile, tea production for the first 6 months of 2018 grew 0.9 percent from a year earlier to 158.2 million kilogrammes, with rainy weather disrupting growth.
For the full year, the central bank projects tea production to increase 3.5 percent to 318.6 million kilogrammes. (Colombo/Nov11/2018)